what errors found in this report:

Background and Scope:

Wellness Health Solutions Limited $($WHS$)$ is a therapeutic company focused on developing and commercialising natural compounded medicines for veterinary use in treating a wide range of diseases in cats and dogs. WHS utilises in house research facilities and dispensing capabilities and has successfully developed and commercialised therapeutic veterinarian medicines which are available in Australia.

You have recently been employed as a junior financial accountant with WHS and have been tasked with assisting the CFO in preparing the draft financial statements for the year ended $30$ June $2024,$ based on the material provided in this memorandum and the accompanying trial balances.

Corporate Profile:

Operations

The Group has two main research $/$ production facilities located on the Gold Coast $($WHS Limited$)$ and in Ballina $($Byron Glow$).$ The Ballina land and buildings were purchased by Byron Glow on $1$ July $2021.$ The group accounting policy is to expense all research and development costs as incurred.

Orders can only be made by approved veterinarians via the secure online portal. All compound pharmaceuticals are made inhouse and then couriered to the veterinarian clinic within $72$ hours. Stocktakes are performed annually at each facility.

The Group has adopted the accounting policy of measuring land and buildings using the revaluation model with the remaining classes of PPE measured using the cost model.

WHS experienced a cyber$-$attack in March $2024,$ in which customer and inventory databases were targeted, resulting in information in these systems being randomly corrupted. The company engaged IT experts to assist with restoring the affected files.

A copy of the financial statements are provided to the bank as per the parent entity$$s lending agreement. Furthermore, the lending agreement requires that the Group not incur any additional debt without the lender$$s prior approval. The loan commenced on $1$ August $2020$; original principal amount was $$7,500,000$ is for a term of six years with an interest rate of $6\mathrm{.}25\%$ per annum.

The company estimates tax payable at $30\%$ of accounting profit in the accounting records.

Acquisition of Subsidiary

WHS acquired $100$ per cent of Byron Glow Pty Ltd $($hereafter collectively referred to as $$the Group$)$ on $1$ July $2020.$ Byron Glow Pty Ltd specialises in the development and provision of wellness supplements and treats, and therapeutic devices for cats and dogs.

Due diligence records related to the acquisition have been supplied by the accounting firm that assisted with the acquisition. These records identify Byron Glow Pty Ltd had share capital of $$300,000$ and Retained Earnings of $$5,500,000$ as at the date of acquisition. The CEO advised the carrying value of assets and liabilities were consistent with fair value at the date of acquisition except for the land and a customer list which was externally acquired on $30$ August $2019.$ The fair value of the Land had been assessed as $$150,000$ higher $($original cost $$750,000)$ than the carrying value at the date of acquisition. Whilst the fair value of the customer list was assessed as being $$30,000$ higher $($original cost $$200,000)$ than carrying value at the

time of acquisition. The company expects the customer list to continue to provide economic benefits indefinitely. No contingent liabilities were identified when Byron Glow Pty Ltd was acquired. Intangible assets are carried at cost in the individual company accounting records. Byron Glow Pty Ltd measure property, plant and equipment at cost in their accounting records.

Acquisition of Long$-$Term Strategic Investment

The long$-$term investment represents a $27\%$ shareholding in a boutique research facility developing new technologies for therapeutic devices for use with larger animals such as horses. The investment was acquired on $1$ July $2022$ for $$1,500,000.$ The consideration paid reflected fair value at the time of acquisition. WWG received a $$15,000$ dividend during the year $($no dividends were paid in the prior year$).$ A copy of the financial statement for the investment company shows the company made a profit after tax of $$150,000$ for the year ended $30$ June $2024(2023$: profit of $$50,000).$ There were no revaluation adjustments noted in the investment company$$s financial statements. The investment is recorded in the financial statements of WWG at cost$.$ The group$$s accounting policy is to account for the long$-$term investment at cost$.$