Referencing Styles : APA TaskThis assessment task consists of five (5) questions. A total of 65 marks are allocated to the questions below, which will then be converted to a mark out of 10%.All workings, when appropriate, must be shown to substantiate your answers. Question 1 [15 marks]Events after the reporting periodSnapper Ltd is finalising its financial statements for the reporting period ending 30 June 2016. On 26 August 2016, before the financial statements have been finalised and authorised for issue, the c … View More Task This assessment task consists of five (5) questions. A total of 65 marks are allocated to the questions below, which will then be converted to a mark out of 10%. All workings, when appropriate, must be shown to substantiate your answers. Question 1 [15 marks] Events after the reporting period Snapper Ltd is finalising its financial statements for the reporting period ending 30 June 2016. On 26 August 2016, before the financial statements have been finalised and authorised for issue, the company’s directors became aware of the following situations: a) The company owns a night club that was completely destroyed by fire on 25 August 2016. The night club had a carrying amount in the draft financial statements of $1,750,000 at 30 June 2016 (which was equal to its fair value), and was insured for $1,500,000. The company has adequate business interruption insurance. b) Snapper held 1,000,000 shares in Prawn Ltd, representing 10% of that company’s share capital, at 30 June 2016. These shares had a carrying amount of $500,000, reflecting a cost of $0.50 per share. On 1 August 2016, Snapper entered into a contract to purchase a further 5,000,000 shares in Prawn (50% of the company’s share capital) for $5,000,000, reflecting the current market value at that date of $1 per share. c) On 5 August 2016, the directors of Snapper Ltd approved the sale of its fishing business in Tasmania. The sale will result in a profit of $79,000 being made by Snapper Ltd. d) On 8 August 2016, Snapper Ltd received an invoice from a supplier for $85,000 for goods delivered in June; the goods were included in closing inventory at an estimated cost of $100,000. e) On 10 June 2016, Snapper Ltd was fined $55,000 by the Australian Taxation Office for not lodging its 2015 income tax return by the due date. The fine has been recognised in Snapper Ltd’s draft financial statements at 30 June 2016 (with an expense of $55,000 recognised, and a payable of $55,000 recognised). On 12 August 2016, after weeks of correspondence and pleading with the Taxation Office, the Taxation Office reduced the fine from $55,000 to $5,000. Required: State, for each situation, whether the event is an adjusting event or non-adjusting event (assuming the amount is material). Provide explanations and references to relevant paragraphs in the accounting standards to support your answers. State the appropriate accounting treatment (including any journal entries needed) for each situation in the 2016 financial statements. Question 2 [15 marks] Accounting for share issues Ketchup Ltd was incorporated on 1 July 2015. The following transactions and events occurred during the year ended 30 June 2016: 1 Jul 2015: Ketchup Ltd makes an offer to the public for investors to subscribe for 5,000,000 shares, at an issue price of $4.00 per share, with $1.50 payable on application, $1.20 being payable within one month of allotment, and $1.30 payable on a call to be made at a later date. The issue is underwritten at a commission of $15,000. 20 Aug 2015: Applications close, with applications received for 4,800,000 shares. 31 Aug 2015: Shares are allotted, and the underwriter forwarded the application and allotment money due on the 200,000 shares less their commission. 30 Sep 2015: All allotment money is received. 31 Oct 2015: The call is made, with money due by 30 November 2015. 30 Nov 2015: All call money is received except for holders of 100,000 shares who fail to meet the ca