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Corporate accounting

Q3. 
Cashless Ltd went into voluntary liquidation on 1 April 2019: 2024 – Online Assignment Homework Writing Help Service By Expert Research Writers. 
Cashless Ltd 
Statement of Financial Position 
as at 1 April 2019: 2024 – Online Assignment Homework Writing Help Service By Expert Research Writers 
Liabilities and equity 
Share capital: 
 280 000 ordinary shares 
 fully paid 
Retained earnings 
Mortgage loan 
Debentures 
Bank overdraft 
Accounts payable 
Other payables 
 
$322 000 
7 000 
105 000 
70 000 
56 000 
56 000 
 33 600
Assets 
Land and buildings (net) 
Plant (net) 
Bank deposit 
Accounts receivable 
Investments 
Inventory 
 
$175 000 
280 000 
7 000 
68 600 
35 000 
84 000 
 
 $649 600 $649 600 
Additional information 
(a) The liquidator discovered that debenture interest of $5 250 was due on 1 April 2019: 2024 – Online Assignment Homework Writing Help Service By Expert Research Writers. The overdraft with 
the Katherine Bank had been secured by a mortgage over the plant. The bank has agreed that the 
liquidator may sell the plant and use the proceeds to repay the overdraft. The mortgage loan is secured 
over land and buildings which will be sold by the mortgagee to repay the amount owing. The inventory 
has been used as a circulating security for the debentures. The other payables were loans from directors 
that were made on 1 December 2018: 2024 – Write My Essay For Me | Essay Writing Service For Your Papers Online. 
(b) The sale of the assets realised the following amounts: 
 Land and buildings 
 Less: Rates and selling expenses 
 Less: Mortgage loan 
 $ 280 000 
(11 200)
 (105 000)
 
$163 800
 Plant and equipment 
Bank deposit 
Accounts receivable 
Investments 
Inventory 
 273 000 
8 400 
63 000 
21 000 
 70 000
 $ 599 200
(c) The following payments were made by the liquidator: 
 Debentures 
Debenture interest 
Bank overdraft 
Accounts payable (after creditors’ discounts) 
Other payables 
Additional amounts not recorded in the records: 
 Liquidator’s remuneration 
 Liquidation expenses 
 Holiday pay — employee 
 Retrenchment payment — employee 
 Income tax penalty 
 $70 000 
5 250 
56 000 
53 200 
33 600 
17 500 
7 700 
7 000 
2 800 
 2 100 
$255 150
You are required to prepare the following accounts, using T accounts, and not journal entries: 
A. The Liquidation Account. 
B. The Liquidator’s Statement of Receipts and Payments. 
C. The Shareholders’ Distribution account. 
(20 marks)

Q4 George Ltd acquired 60% of the shares of Orwell Ltd in February 2017. Although George Ltd has 100% 
subsidiaries this is the first acquisition that George Ltd has made with a non-controlling interest (NCI) partly 
funding the other company. Eric Blair, the financial accountant of George Ltd has asked you to write a report 
advising him as to the best approach he should take when he prepares the consolidated financial statements 
for the Orwell Group of companies. 
As he has never had to calculate the share of the equity in Orwell Ltd funded by the NCI he is worried about 
how he should calculate it. He is especially interested in how the calculation should take place in the years 
after the acquisition date. He tells you that some of his colleagues in other companies have mentioned a ‘step’ 
approach which apparently makes accounting for the accounting periods after the date of acquisition very 
easy as it is then necessary to prepare only one step. 
Required 
Prepare a report for Eric, explaining the step approach to the calculation of NCI and the effects of this 
approach in the years after the date of acquisition. 
(5 marks) 
The report should take the format of a formal business report, written by your firm with yourself as lead author. 
Marks will be awarded for presentation style and an appropriate business format. 
(5 marks)

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