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Accounting 6 Pages

Advanced Accounting B326

Question

 Arab Open University

B326: TMA –2nd Semester 2014-2015

About TMA:

The TMA covers the advanced accounting concepts and practices in the businesses. It is marked out of 100 and is worth 20% of the overall assessment component. It is intended to assess students’ understanding of some of the learning points within chapter 1, 3,4 and 5 beside the supplementary material. This TMA requires you to apply the course concepts. The TMA is intended to:

     
  • Assess students’ understanding of key learning points within chapter 1, 3,4 and 5. 
  • Increase the students’ knowledge about the reality of the advanced Accounting. 
  • Develop students’ communication skills, such as memo writing, essay writing, analysis and presentation of material.
  • Develop the ability to understand and interact with the nature of the advanced accounting tools in reality.  
  • Develop basic ICT skills such as using the internet.
  •  

The TMA:

This TMA is based around two cases of “business combination and “intercompany transaction and relevant information”. Marks will be awarded for blending the context of each case and with relevant theory by means of your own interpretation. In addition to this, some research is required.

The TMA requires you to:

     
  1. Review various study sessions beside the supplementary materials.
  2. Conduct a simple information search using the internet.
  3. Present your findings in not more than 1800 words ± 10% 
  4. You should use a Microsoft Office Word and Times New Roman Font of 12 points.
  5. You should read and follow the instructions below carefully. Each part of the process will carry marks for the assignment.
  6.  

Criteria for Grade Distribution:

 Criteria
 
 Content
 
 Referencing& e-library 
 
 Structure and Presentation of ideas
 
 Total marks
 
 Part A
 
 Part B
 
 Marks
 
 65
 
 35
 
 (5)
 
 (5)
 
 100
 


The TMA Questions

PART A: case study (Apple Inc)

The internet is a good place to get information that is useful to you in your study of accounting. For example, you can find information about current events, professional accounting organizations, and specific companies that may support your study. 

Apple Inc designs, manufactures, and markets mobile communication and media devices, personal computers, and portable digital music players, and sells a variety of related software, services, accessories, networking solutions, and thirdparty digital content and applications. The Company’s products and services include iPhone®, iPad®, Mac®, iPod®, Apple TV®, a portfolio of consumer and professional software applications, the iOS and OS X® operating systems, iCloud®, and a variety of accessory, service and support offerings. In September 2014, the Company announced Apple Watch™, which is expected to be available in early calendar year 2015, and Apple Pay™, which became available in the U.S. in October 2014.

The Company also sells and delivers digital content and applications through the iTunes Store®, App Store™, iBooks Store™ and Mac App Store. The Company sells its products worldwide through its retail stores, online stores and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers and value-added resellers. In addition, the Company sells a variety of third-party iPhone, iPad, Mac and iPod compatible products, including application software, and various accessories, through its online and retail stores. The Company sells to consumers, small and mid-sized businesses (“SMB”) and education, enterprise and government customers. The Company’s fiscal year is the 52 or 53-week period that ends on the last Saturday of September. The Company is a California corporation established in 1977.

Access the GM home web page at: www.apple.com From Apple home page and then “The Company”, click on “FINANCIAL INFORMATION”, followed by “Reports and results”, then select the year September 2014 to display and download the “Annual report and accounts” 2014 on Form PDF. 

Note: the financial statements of Apple are available at:

http://investor.apple.com/financials.cfm

Instructions Use the annual report and accounts of 2014 to answer the following questions:

     
  1. What are Apple business strategies? And how do they achieve these strategies?
  2.  

[Marks 8]

     
  1. What are the risk factors affecting Apple Inc?
  2.  

[Marks 8]


     
  1. In the annual report apple mentioned that they measure certain asset and liabilities using fair value measurement, according to FASB there are three level hierarchy for the fair value measurement technique explain them? Mention example from the balance sheet for asset and liabilities that were measured at fair value for each level.
  2.  


[Marks 9]

     
  1. Write a memo explaining: (Hint: Explain and support your memo by suitable figures from the apples annual report.) 
  2. What was the composition of identifiable and unidentifiable intangible assets reported by apple?
  3. How do apple account for their intangible asset and the goodwill?
  4. How much impairment did Apple report from the intangible assets and goodwill?
  5. What is the recent acquisitions apple made, and how did effect the goodwill?
  6.  

      [Marks 16]


     
  1. What are the steps that the company has to do in time of merger transaction?
  2.  

[Marks 8]

     
  1. What are the obstacle that may lead to merger failure?
  2.  

[Marks 8]


     
  1. What are the conditions to consolidate the financial statement and what are the benefits of consolidating the financial statements?
  2.  


[Marks 8]


PART B: case study 


Using the equity method solve the following:


Below are the income statement information for 2012 of Pearl and its 80% owned subsidiary “Rubi”.

 

 
 

Pearl

 
 

Rubi

 
 

Sales

 
 

2,000,000

 
 

1,200,000

 
 

Cost of goods sold

 
 

1,000,000

 
 

800,000

 
 

Gross profit

 
 

1,000,000

 
 

400,000

 
 

Operating expense

 
 

500,000

 
 

160,000

 
 

Net income

 
 

500,000

 
 

240,000

 


During 2012, Pearl sold to its subsidiary inventory for $400,000 with a gross profit $80,000. The remaining inventory on the hand of subsidiary is 40%.


Required

     
  • Compute the unrealized profit – ending 
  •  

[Marks 5]

     
  • Compute profit for 2012 for the 
       
    • Non-controlling interest 
    • Parent profit
    •  
  • Prepare the consolidated income statement for 2012, and show the elimination entries. 
  •  

Use the following headings (below) to make up the different sections of your work:


 

 
 The PT3 form 
 
 

 
 Title and contents page
 
 

 
 References (Recorded according to the Harvard style - Available on LMS)   
 
Solution

Title: Advanced Accounting B326
Length: 6 pages (1650 Words)
Style: Havard

Preview

Advanced Accounting B326

Question 1

The business strategy that Apple is employing in carrying out its business is maximizing on its unique skill to design and come up with its operating systems, application software not forgetting its hardware components. These products and services enable Apple to achieve its goal of creating the best user experience to its customers through its innovative design, user-friendly applications and products that are easy to integrate. The company is also expanding its platform in the use of iTunes Store to discover and deliver applications as well as third-party digital content. The iTunes Store enables Apple customers to discover and download books and applications using Apple products such as Mac computers, Windows-Based computers, iPod touch, iPad and iPhone devices.

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