Assignment:
1. Word limit : 1,500 words
Question 1 : Company boards, executives, and management are investing more and more time and resources on issues of sustainability - such as carbon (greenhouse gas emissions), energy efficient technology, water use, cleantech, and biodiversity, to name just a few. An important part of the global push towards sustainability practices involves a need to account for, and report on, sustainability - sometimes referred to as environmental, social, and governance (ESG) reporting "Corporate social responsibility (CSR) is an issue of growing interest, and the reporting of socially responsible activity is becoming more prevalent as investors, customers, and other stakeholders demand greater transparency about all aspects of business. As the importance placed by stakeholders on socially responsible behavior has increased, the attitude toward CSR has changed dramatically over the last few decades" (Kim, Park and Weir, 2012, p. 761).
Reference:
Kim, Y., Park, M. S., & Wier, B. (2012). Is earnings quality associated with corporate social responsibility? The Accounting Review, Vol. 87, No. 3, pp. 761-796.
Required:
(a) Critically discuss the above statement.
(b) Identify a company which is listed on the ASX, collect recently published annual report from the company webpage and discuss what types of social responsibility information the company provides in the annual report? Do you think that your chosen company's CSR disclosures are adequate for the stakeholders of the company? (Please note that each group needs to select different company after consultation with the tutor).
Note 1: Word limit for Question 1 is 1,000.
Note 2: Professional marks will be awarded for format, clarity and expression.
Note 3: The presentation of Question 1 should include Introduction, Discussion, Conclusion and List of references.
Note 4: You will be able to obtain electronic copies of articles by visiting La Trobe University Library website.
Question 2 (Word limit = 500 words)
Merinda Ltd commences its operations on 1 July 2017. One year after the commencement of its operations (30 June 2018) the entity presents its first Statement of Comprehensive Income and Statement of Financial Position on 30 June 2018. The statements are prepared before considering taxation. The following information is available.
Merinda Ltd
Statement of Comprehensive Income
for the year ended 30 June 2018
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$
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$
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Sales Revenue
Less Cost of Goods Sold
Gross Profit
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7,625,000
2,585,000
5,040,000
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Expenses:
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Administrative expenses
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529,200
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Salaries
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725,000
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Provision for doubtful debts
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126,000
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Long service leave
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252,000
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Warranty expenses
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151,200
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Depreciation expense - Machinery
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201,000
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Insurance
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138,600
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2,154,000
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Accounting profit for the year
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2,917,000
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Merinda Ltd
Assets and Liabilities as disclosed in the Statement of Financial Position
for the year ended 30 June 2018
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$
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$
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Assets
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|
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Cash
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103,700
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Inventory
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577,800
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Receivables (net)
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378,000
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Prepaid insurance
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51,900
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Machinery - cost
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2,010,000
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Less accumulated depreciation
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201,000
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1,809,000
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Land
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2,268,000
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Total assets
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4,283,900
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Liabilities
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Payables
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403,200
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Provision for warranty expenses
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100,800
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Loan payable
|
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975,000
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Provision for long service leave
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88,200
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Total liabilities
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1,567,200
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Net assets
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2,716,700
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Other information:
All administration and salaries expenses incurred have been paid as at year-end.
The amount of $163,800 long service leave expense has been paid.
The machinery is depreciated over 10 years for accounting purposes, but over 8 years for taxation purposes.
Amounts received from sales, including those on credit terms, are taxed at the time of the sale is made.
Warranty expenses were accrued and, at the year-end, actual payments of $50,400 had been made (leaving of accrued balance of $100,800). Deductions for tax purposes are only available when the amounts are paid and not as they accrued.
Insurance was initially prepaid to the amount of $190,500. At the year-end, the unused component of the prepaid insurance amounted to $51,900. Actual amounts paid are allowed as a tax deduction.
Merinda Ltd has some land which cost $1,470,000 and which has been revalued to its fair value of $2,268,000.
The tax rate is 30 per cent.
Required:
Compute the taxable income or loss.
Complete the Taxation Worksheet in accordance with AASB 112 Income Taxes.
Merinda Ltd
Taxation Worksheet as at 30 June 2018
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Item
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Carrying amount
$
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Tax Base
$
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Deductable
Temporary Difference
$
|
Taxable Temporary Difference
$
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Tax Expense
$
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Revaluation Surplus
$
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Tax Payable
$
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|
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Prepare the applicable journal entries at 30 June 2018 to account for tax using the Balance Sheet method.