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Knowledge of the Key Topics

Question:

 

Instructions:

All questionsmust be answered by using the answer boxes provided in this paper.
Completed answers must be entered on this paper and submitted to Blackboard by the published due date and time.  

Purpose:

This assessment consists of six (6) questions and is designed to assess your level of knowledge of the key topics covered in this unit

1. Discuss why and how might management not act in the interests of the firm.

2. ABC Ltd acquires some machinery at a cost of $500 000 on 1 July 2021. On 30 June 2022, the machinery, which has an accumulated depreciation balance of $80 000, is assessed as having a fair value equal to $400 000. ABC Ltd measures machinery at fair value.

Required:

Provide the journal entries to reflect the revaluation decrement.

3. Referring to the Accounting standard AASB16, explain howa right-of-use asset measured at lease inception.

4. Discuss when should a company in the extractive industries start accounting for its restoration costs?

5. ABC Ltd is marketing a ‘surfing bundle’ in which, for $3200, it provides customers with a surfboard (which retails separately for $2550), a wetsuit (which retails separately for $750) and five lessons (which retail separately for $600).

You are required to determine:

a. Whether separate performance obligations exist, and to explain why you made this judgement.
b. How much of the transaction price to allocate to each performance obligation?
 
6. Discuss according to Legitimacy Theory, what are the implications for an organisation that fails to comply with the expectations held by society?
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