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Accounting and Finance Test

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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

2                      Rs. 20,000                   Rs. 40,000

3                      Rs. 30,000                   Rs. 20,000

4                      Rs. 45,000                   Rs. 10,000

5                      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.

 

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).

 

 

  Remember! This is just a sample.

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