Question 1 20 marks Sigma Ltd is a medium-sized Australian retailing company that was registered as a proprietary company until 31 December 2021 when it changed to a public company and listed its shares on the Australian Securities Exchange (ASX). It is March 2022 and the senior management of Sigma Ltd are currently evaluating an investment in Pegasus Ltd. Any investment in Pegasus Ltd would occur on 1 July 2022. A financial analyst was employed to analyse Pegasus Ltd. The financial analyst has made the following projections: On 1 July 2022, Pegasus Ltd is projected to have assets of $3 million and liabilities of $1 million. The financial analyst believes that many of Pegasus Ltd's assets are carried at amounts well below their fair values whilst all liabilities are carried at fair value. Pegasus Ltd has no unrecorded liabilities and only one unrecorded asset. This asset is a brand name that currently has an estimated fair value of $150,000. Sigma Ltd would like very much to obtain this brand name. However, previous offers to purchase it were unsuccessful. Total comprehensive income for the year ending 30 June 2023 is projected to be $500,000. Of this amount, $300,000 would be net profit whilst $200,000 would be other comprehensive income. . During the year ending 30 June 2023, Pegasus Ltd is projected to purchase approximately $150,000 of inventory from Sigma Ltd and sell $50,000 of non-current assets to Sigma Ltd. In addition, Pegasus Ltd is expected to pay a dividend of 5 cents per share. During the year ending 30 June 2022, Sigma Ltd made a $30,000 loan to Pegasus Ltd. The loan term is five years, and the interest rate is 5%. The investment options are as follows: The investment options are as follows: Option 1: purchase 30% of the issued shares of Pegasus Ltd on 1 July 2022. This would require the purchase of 90,000 shares at a projected price of $15 each. Option 2: purchase 80% of the issued shares of Pegasus Ltd on 1 July 2022. This would require the purchase of 240,000 shares at a projected price of $15 each. Required The management of Sigma Ltd has asked you, as one of the company's accountants, to prepare a memorandum to be distributed to the company's shareholders that explains the accounting requirements for each of these two investment options. As part of your answer, you should explain clearly: The accounting requirements for each of the options, How the profit of Pegasus Ltd would be recognised by Sigma Ltd in the financial statements, and Whether the investment would give Sigma Ltd control over the brand name owned by Pegasus Ltd. Word limit: approximately 800 words. Question 2 5 marks AASB 15 Revenue from Contracts with Customers is an important standard for accountants to understand because it sets out the principles that an entity is required to apply to report useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer. This standard is the international equivalent of IFRS 15 Revenue from Contracts with Customers. AASB 15 Revenue from Contracts with Customers is available from the AASB website: https://aasb.gov.au/pronouncements/accounting-standards/ Required (a) Use an internet search engine (for example, Google) to find two resources that, in your opinion, would be useful to you in gaining an understanding of AASB/IFRS 15 Revenue from Contracts with Customers. Your resources should be as follows: One resource must be a document. Here a document refers to a website/webpage, or a document (for example, a PDF or Word document) that is downloadable. One resource must be a video. You do not need to include the document or video with your answer, but you do need to include: name of document/video, author, date, and the link to the document/video. You should not include AASB/IFRS 15 Revenue from Contracts with Customers as one of your documents. In addition, you should not include any document that merely summarises AASB/IFRS 15 Revenue from Contracts with Customers. (2 marks) (b) Explain why these two resources would be useful to you in gaining an understanding of AASB/IFRS 15 Revenue from Contracts with Customers. Your discussion should consider the following: Are the resources authoritative and credible? Consider who the author is. Are the resources up to date? What makes the resources useful? For example, comprehensive coverage of the topic, clear and simple explanations, useful diagrams, and examples, etc.) (2 marks) (c) Identify two other activities that you would use to gain an understanding of AASB/IFRS 15 Revenue from Contracts with Customers in addition to using resources found from an internet search. (1 mark) Word limit: approximately