Question

In: Accounting

Bands’End Ltd has 6 shareholders, each of whom is a director involved in the day to...

Bands’End Ltd has 6 shareholders, each of whom is a director involved in the day to day operations of the community. Landed Ltd has only 86 full-time employees each of whom has direct, personal contact with the directors.

The financial statements of Bands’ End Ltd for the year ended 30 June 2015 show:

Gross assets of $14,500,000 and

Gross revenue of $24,001,000.

Equity 5.5million

Explain, justifying your answer, if Bands’ End Ltd is required by the Corporations Act 2001 to produce an annual report according to AASB accounting standards for the year ending 30 June 2017?

Solutions

Expert Solution

The applicable portion is chapter 2M

The company is covered by Corporations Act 2001 if it is registered in Australia. It is not explicitly mentioned that the company is backed by personal guarantee of the shareholders.

The ACT requires identification of entities which are required to prepare financial report.

Entities which are required to present financial reports are the entities where the ownership and management has a disconnected relationship and where the users having financial ownership and interest in the entity are dependent on the financial report for making and evaluating resource allocation decisions. This is not the case for Bands End where each shareholder is a director and is involved day to day operations of the company.

The company has to prepare the financial report if any one of the shareholders requests for it in writing since each shareholder holds more than 5% voting shares. However, whether the financial report has to comply with all the accounting standards or whether it has to be audited will depend on the purpose and nature of request.

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Nonsense Pty Ltd has 6 shareholders, each of whom is a director involved in a day...
Nonsense Pty Ltd has 6 shareholders, each of whom is a director involved in a day to day operations of the company. Nonsense Pty Ltd has only 8 full time employees each of whom has direct personal contract with the directors. The financial statements of Nonsense Pty Ltd for the year ended 30 June 2019 show: - GROSS ASSETS OF $40,000,000 a LIABILITY OF 9000,000 owed entirely to a public sector bank and - Gross revenues of $60000,000 Explain, justifying...
Flashy Ltd is involved in the manufacture of Ugg boots. The director wishes to sell the...
Flashy Ltd is involved in the manufacture of Ugg boots. The director wishes to sell the business to a long-standing competitor, Boots Ltd. The financial statements of Flashy Ltd at 1 July 2019 contained the following information: Assets Current assets Cash 7,500 Accounts receivable 11,000 Inventories 16,500 Total current assets 35,000 Non-current assets Vehicles 32,000 Accumulated depreciation (5,500) Trucks 37,000 Accumulated depreciation (6,300) Machinery 22,000 Accumulated depreciation (3,000) Buildings 49,000 Accumulated depreciation (4,500) Land 90,000 Total non-current assets 210,700 Total...
Flashy Ltd is involved in the manufacture of Ugg boots. The director wishes to sell the...
Flashy Ltd is involved in the manufacture of Ugg boots. The director wishes to sell the business to a long-standing competitor, Boots Ltd. The financial statements of Flashy Ltd at 1 July 2019 contained the following information: Assets Current assets Cash 7,500 Accounts receivable 11,000 Inventories 16,500 Total current assets 35,000 Non-current assets Vehicles 32,000 Accumulated depreciation (5,500) Trucks 37,000 Accumulated depreciation (6,300) Machinery 22,000 Accumulated depreciation (3,000) Buildings 49,000 Accumulated depreciation (4,500) Land 90,000 Total non-current assets    210,700 Total...
Flashy Ltd is involved in the manufacture of Ugg boots. The director wishes to sell the...
Flashy Ltd is involved in the manufacture of Ugg boots. The director wishes to sell the business to a long-standing competitor, Boots Ltd. The financial statements of Flashy Ltd at 1 July 2019 contained the following information: Assets Current assets Cash 7,500 Accounts receivable 11,000 Inventories 16,500 Total current assets 35,000 Non-current assets Vehicles 32,000 Accumulated depreciation (5,500) Trucks 37,000 Accumulated depreciation (6,300) Machinery 22,000 Accumulated depreciation (3,000) Buildings 49,000 Accumulated depreciation (4,500) Land 90,000 Total non-current assets    210,700 Total...
MLS Company has five employees, each of whom earns $1,600 per month and is paid on the last day of each month.
MLS Company has five employees, each of whom earns $1,600 per month and is paid on the last day of each month. All five have been employed continuously at this amount since January 1. On June 1, the following accounts and balances exist in its general ledger: a. FICA—Social Security Taxes Payable, $992; FICA—Medicare Taxes Payable, $232. (The balances of these accounts represent total liabilities for both the employer’s and employees’ FICA taxes for the May payroll only.) b. Employees’...
Franco Company has 20 employees, each of whom earns $2,600 per month and is paid on the last day of each month.
Franco Company has 20 employees, each of whom earns $2,600 per month and is paid on the last day of each month. All 20 have been employed continuously at this amount since January 1. Franco uses a payroll bank account and special payroll checks to pay its employees. On March 1, the following accounts and balances exist in its general ledger:a.FICA—Social Security Taxes Payable, $7,800; FICA—Medicare Taxes Payable, $1,770. (The balances of these accounts represent total liabilities for both the...
The managing director of Small Ltd has asked you to calculate the taxable income for 30/6/2017...
The managing director of Small Ltd has asked you to calculate the taxable income for 30/6/2017 and prepare the journal entry to record current tax liability based on the data below. Assume tax rate is 30% Accounting Profit before tax $ 60 000 After debiting the following Expenses: Entertainment costs * 6 500 Goodwill impairment loss * 8 000 Fines and Penalties * 10 000 Depreciation on equipment 11 000 Annual Leave expense 5 000 Warranty expense 6 000 For...
Empire Sdn Bhd has five shareholders, May, Ivy, James, Norman, and Penny, all of whom are...
Empire Sdn Bhd has five shareholders, May, Ivy, James, Norman, and Penny, all of whom are also directors of the company. May, Ivy and James together hold 70% of the company’s issued capital. ISSUES: For some time now, May, Ivy and James have used their majority power to pursue activities which have resulted losses to the company. For instance, they have purchased a (1) holiday bungalow in Bukit Tinggi at a cost of RM5 million is which is used on...
Week 6 - Question 1 (10 marks) Polyester is a director of Style Pty. Limited involved...
Week 6 - Question 1 Polyester is a director of Style Pty. Limited involved in in making women's clothing. Situation 1. She arranges with the companies bank to transfer an amount of $65,000 from the company account into a personal bank account held by her in her own name. She uses the funds to finalize some outstanding personal debts. Situation 2. As a director she receives information that the company is in a serious financial position. She arranges to transfer...
BillDave Supplies Ltd, employs 100 salesmen, each of whom covers a different area and is supplied...
BillDave Supplies Ltd, employs 100 salesmen, each of whom covers a different area and is supplied with a car. At the end of each week, each salesman submits an expense claim on a pre-printed form with supporting vouchers attached. Expenditure is on fuel together with invoices for hotel accommodation, meals and entertainment are not attached. Claims are scrutinized by the Assistant Accountant. She raises any queries with the salesmen concerned and makes out cheques for signature by the two Directors....
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT