Reference no: EM132591955 , Length: 500 Word
ABSAS SOLUTIONS PVT LTD TEST ASSIGNMENT - Accounting and Finance Test
This test assignment has been divided into two parts. First part contains an essay of 500 words on the topic provided and second part includes numerical questions of finance.
Kindly complete both the parts. Make sure that your essay is plagiarism free and you have provided proper calculations in the practical part.
PART 1 -
Please write an essay of approximately 500 words on the topic provided below. Make sure that you do not copy paste anything from internet, you can see the required material from internet but you need to write each and every sentence in your own words.
Topic: Whether banking and supervisory structures at EU level proved adequate in responding to the debt crisis.
Referencing: APA (Minimum 7 References)
PART 2 - Please solve both the questions using MS EXCEL
Question 1 - A firm whose cost of capital is 10% is considering two mutually exclusive projects X and Y, the details of which are:
|
|
Year
|
Project X
|
Project Y
|
|
Cost
|
0
|
Rs. 70,000
|
Rs. 70,000
|
|
Cash Inflows
|
1
|
Rs. 10,000
|
Rs. 50,000
|
|
|
|
Rs. 20,000
|
Rs. 40,000
|
|
|
|
Rs. 30,000
|
Rs. 20,000
|
|
|
|
Rs. 45,000
|
Rs. 10,000
|
|
|
|
Rs. 60,000
|
Rs. 10,000
|
Compute the Net Present Value at 10%, Profitability Index, and Internal Rate of Return of the two projects.
Question 2 - Nick Ltd acquired 100% of the issued capital of Wing Ltd on 1 July 2011 for $270000. The statements of financial position of the companies immediately after the acquisition are provided below. All assets have been reported following fair value.
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Statement of Financial Position For the year ended 1 July 2011
|
|
|
Nick Ltd $
|
Wing Ltd $
|
|
Shareholders' equity
|
|
|
|
Share capital
|
450,000
|
180,000
|
|
General reserve
|
45,000
|
25,000
|
|
Retained earnings
|
140,000
|
20,000
|
|
Total shareholders' equity
|
635,000
|
225,000
|
|
Assets
|
|
|
|
Current assets
|
|
|
|
Cash at Bank
|
50,000
|
30,000
|
|
Accounts Receivable
|
20,000
|
10,000
|
|
Inventory
|
100,000
|
25,000
|
|
|
170,000
|
65,000
|
|
Non-current assets
|
|
|
|
Investment in Wing Ltd
|
270,000
|
----
|
|
Land
|
250,000
|
200,000
|
|
Plant & Equipment
|
100,000
|
80,000
|
|
|
620,000
|
280,000
|
|
Total assets
|
790,000
|
345,000
|
|
Liabilities
|
|
|
|
Current liabilities
|
|
|
|
Accounts Payable
|
40,000
|
10,000
|
|
Interest Payable
|
15,000
|
8,000
|
|
|
55,000
|
18,000
|
|
Non-current liabilities
|
|
|
|
Bank loan
|
100,000
|
102,000
|
|
Total liabilities
|
155,000
|
120,000
|
|
Net assets
|
635,000
|
225,000
|
Required -
1. Calculate Goodwill (show workings).
2. Prepare consolidation journal entry at the date of acquisition.
3. Prepare consolidation worksheet.
4. Prepare the consolidated statement of financial position as at 1 July 2011 (immediately after the acquisition).