ACC1AMD Accounting for Management Decisions

 

Question 1 (4 marks)

You have been provided (next page) with the unadjusted and adjusted trial balance for KayLee Limited’s operations at 30 June 2017. You are required to:

(a) Record the opening balance of each account in the correct T.Account(ie. Before adjusting entries) (b) Record the adjusting entries in the General Journal using the following format:

Date Account name (narration)

(c) Record the adjusting entries in the correct T.Account. (d) Balance the T.Accounts.

Post

$$ Ref

Debit

Credit

(e) Prepare a Statement of Profit and Loss, Statement of Changes in Owners' Equity and a Statement of Financial Position (Balance Sheet) – please use the Net Asset Balance Sheet Format.

NOTE: to maximise your mark you must include correct titles, narrations, dates etc. This is an assignment, not under exam conditions, therefore attention to detail is expected.

 

KAYLEE LIMTED TRIAL BALANCE AT 30 JUNE 2017

  
Unadjusted

 
Adjusted

 
No.

Account Name

Dr

Cr

Dr

Cr

100

Cash

 
9

15,600

  
-

 
9

15,600

  
-

110

Accounts Receivable

  
43,200

  
-

 
1

03,200

  
-

120

Prepaid Rent

 
1

80,000

  
-

 
1

20,000

  
-

130

Supplies

  
72,000

  
-

  
36,000

  
-

150

Equipment

 
9

60,000

  
-

 
9

60,000

  
-

151

Accumulated Depreciation - Equipment

  
-

  
-

  
-

  
48,000

200

Accounts Payable

  
-

  
153,600

  
-

 
1

53,600

210

Salaries Payable

  
-

  
-

  
-

  
86,400

220

Interest Payable

  
-

  
-

  
-

  
7,200

230

Comm Rev. Rec'd in Advance

-

96,000

-

43,200

250

Bank Loan

  
-

  
720,000

  
-

  
720,000

300

Share Capital

  
-

  
840,000

  
-

  
840,000

310

Retained Earnings

  
-

  
-

  
-

  
-

311

Dividends

  
24,000

  
-

  
24,000

  
-

400

Service Revenue

  
-

  
621,600

  
-

  
681,600

410

Commission Revenue

  
-

  
360,000

  
-

  
412,800

500

Salaries Expense

  
434,400

  
-

 
520,800

  
-

510

Rent Expense

  
120,000

  
-

 
180,000

  
-

520

Depreciation Expense

  
-

  
-

  
48,000

  
-

530

Supplies Expense

  
-

  
-

  
36,000

  
-

540

Electricity Expense

  
42,000

  
-

  
42,000

  
-

550

Interest Expense

  
-

  
-

 
7,200

  
-

      
      
   
2,791,200

 
2,791,200

 
2,992,800

 
2,992,800

 

Question 2 (5 marks)

 

You need to follow the “Assignment 2 – Question 2 Guide” available under the “Assignment” tab.

  1. (a)  Select a publicly listed company and briefly explain the industry the company operates

    within and why your group selected the company. (50 words)

  2. (b)  Using the Library DatAnalysis Premium Database (refer to the Assignment 2 – Question 2 Guide) download your company’s data for 2016 and 2017 and complete a Horizontal Analysis of the Profit and Loss, Balance Sheet, Cash Flow and Ratios. Set the $ movement to “no decimal places” and the % movement to “2 decimal places”.

  3. (c)  Using the horizontal analyses information, in your own words, write a report individually analysing the Profit and Loss, Balance Sheet and Cash Flow Statement. This is to be in your own words not a report copied from a financial advisor on the internet. Marks will be significantly deducted if it is not in your own words. (150 words)

  4. (d)  Analyse the ratios that we have studied and discuss how the company is performing.

    Only use the Current ratio, Receivables Turnover, Average Collection Period, Inventory Turnover, Average Days in Inventory, Profit Margin, return on Assets, Return on Ordinary Shareholders’ Equity, Debt to Total Assets and Times Interest Earned. (250 words)

    Please note only refer to those ratios that are provided on the “ratios” tab, do not attempt to calculate them yourself.

  5. (e)  Draw an overall conclusion as to whether you would invest in the company and why. (150 words)

  6. (f)  Ensure you include a screen copy of each of the four tabs with your horizontal analysis within your report. Where you include them is up to you based on your report presentation.

Remember: Please save your completed assignment as a .pdf document to ensure your layout is retained.

 

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