Assessment 3
Assignment
BUS1AFX – Accounting and Finance Fundamentals
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Content Development Review
Academics are required to perform the following checks on the content development plans contained within
this document.
Please ensure that the plan for content development:
1. is relevant to the subject matter, SILOs and your planned delivery
2. sufficiently covers the
eadth of the subject (no missing key topics, concepts or terms)
3. sufficiently covers the depth of the subject appropriate for the year level
4. is well-ordered to support learners’ growing understanding of the subject, and to match your
delivery
Declaration
I have completed all aspects of the above review.
Name:
Date:
Version number:
© Didasko 2020. All rights reserved. 3
Before you begin
Objectives
This is an individual assignment. Students are not permitted to work in a group when writing this
assignment.
Copying and Plagiarism
This is an individual assignment. Students are not permitted to work in a group when writing this
assignment. Plagiarism is the submission of another person’s work in a manner that gives the
impression that the work is their own. La Trobe University treats plagiarism seriously. When detected,
penalties are strictly imposed.
Further information can be found on http:
www.latrobe.edu.au/students/academic-
integrity/explanation/plagiarism
Submission Guidelines
Your assignment submission should be typed, not written/drawn by hand.
Submit the electronic copy of your assignment through the subject LMS.
Submission after the deadline will incur a penalty of 5% of the available assignment mark per day
capped at 5 days. No assignment will be accepted after 5 days. If you have encountered difficulties
that lead to late submission or no submission, you should apply for special consideration.
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Background
Assessment type: Assignment
Word count: 1,000
Task weighting: 20%
The assignment consists of 4 case studies. You are required to attempt all tasks from these 4 case studies.
The Marks for this Assignment will be calculated as follows:
Case Study 1 75
Case Study 2 40
Case Study 3 50
Case Study 4 35
Total Unadjusted Mark 200
Total Adjusted Mark 20
Tasks
This assessment requires you to analyse, compute, present and interpret accounting and financial information
as it applies to for-profit and not-for-profit entities.
To help with this, you have been set 4 case studies, each with specific tasks.
To satisfy the task requirements you will use techniques covered within multiple topics of BUS1AFX.
To do well in this assessment, you must attempt and complete each case study and its specific tasks. Your
esponses should be clear, concise and supported by strong quantitative evidence. Marks for each Case
Study and its’ specific tasks are clearly labelled in the marking ru
ic below.
Once completed, save your file as ‘BUS1AFX_Assessment3_xxxx.docx’ (where xxxx is your student
number) and upload it to the learning portal through the assessment 1 link.
© Didasko 2020. All rights reserved. 5
Case Study 1 (75 marks)
Acer Vale is a new subu
of an Australian capital city. There are many young families with primary-school
aged children. On 1 July 2019, 100 residents of Acer Vale got together to establish a junior soccer club – AV
United. In the first year of operation, AV United completed the following transactions. You are the treasurer.
Transaction Details
1 On 1 July 2019, 200 people each contributed $120 to establish– AV United. A bank account
in that name was opened at Big Bank.
2 On the same day, AV United held a registration day for junior soccer players. 220 juniors
each paid their annual registration fee of $20.
3 On 15 July 2019, AV United signed an agreement with Acer Vale Council, whereby AV
United would rent from council a soccer ground until 30 June 20X9 at a cost of $2,000. AV
United paid that amount immediately.
4 On 1 August 2019, AV Untied purchased 300 club jumpers from Merino Ltd at a total cost
of $6,000. Merino Ltd required a cash payment of 30% with the balance due on 1 July
20X9. AV United will sell the jumpers to its junior soccer players.
5 During the month of August, AV United sold 200 club jumpers to its junior soccer players at
a mark-up from cost price of 20%. Half of sales were cash sales; the rest will be due within
one year.
6 On 1 September 2019, AV United purchased portable soccer goals for $2,500 cash. The
useful life is assessed as 10 years.
7 On the same day, 20 soccer balls were purchased for $50 each. The soccer balls will be
used for training and matches until 30 June 20X0 and then replaced.
8 On 1 March 2020, a gala movie event raised $30,000 before deducting costs. The purpose
of the event was to enable AV United to purchase a minibus to assist some junior soccer
players getting to games in neighbouring subu
s. The cost of the event was $10,000 which
was paid to the venue operator on that day.
9 On 1 June 2020, AV United paid the utilities bill for $3,000 for training usage.
10 On 30 June 2020, AV United purchased a second-hand Ford Transit Minibus for $30,000.
AV united takes 5-year loan for half of this purchase. The useful life is assessed as 10
years.
6 © Didasko 2020. All rights reserved.
Task 1
Prepare the worksheet for AV United. (30 marks)
Task 2
Prepare the Income Statement for the year ended 30 June XXXXXXXXXXmarks)
Task 3
Prepare the Statement of Financial Position (Balance Sheet) as at 30 June XXXXXXXXXXmarks)
Task 4
Prepare the Statement of Cash Flows (using the Indirect Method) for the year ended 30 June XXXXXXXXXXNotes
to the Statement of Cash Flows are not required. (15 marks)
© Didasko 2020. All rights reserved. 7
Case Study 2 (40 marks)
In August 2019, Sara Ricci was researching two companies listed on the Australian Securities Exchange
(ASX). The companies operate in the same industry. She has collected the following information for Delta Ltd
and Epsilon Ltd for the financial years ended 30 June 2018 and 2019.
Delta Ltd Epsilon Ltd
30 June 20X8 30 June 20X9 30 June 20X8 30 June 20X9
INCOME STATEMENT $m $m $m $m
Product Revenue
1,000
1,250
XXXXXXXXXX,000
2,100
Service Revenue 2,500 2,908 7,805 8,494
Total Income 3,500 4,158 9,805 10,594
Cost of Sales 1,690 1,710 5,800 5,922
Gross Profit 1,810 2,448 4,005 4,672
Rent Expense XXXXXXXXXX
Depreciation Expense XXXXXXXXXX,300 1,025
Utilities Expense XXXXXXXXXX
Interest Expense XXXXXXXXXX
Net Profit before tax 1,099 1,505 2,023 2,951
Income Tax XXXXXXXXXX
Net Profit after tax 699 1,005 1,223 1,751
BALANCE SHEET
Cash XXXXXXXXXX
Accounts Receivables XXXXXXXXXX
Inventories XXXXXXXXXX,200
Equipment XXXXXXXXXX
Motor Vehicle XXXXXXXXXX,300
PPE XXXXXXXXXX,840 4,515
Total Assets 1,014 1,331 8,975 9,280
Accounts Payables XXXXXXXXXX
Cu
ent Bo
owings XXXXXXXXXX
Mortgage Payable XXXXXXXXXX
Long-term Bo
owings XXXXXXXXXX,606 2,406
Total Liabilities XXXXXXXXXX,010 2,805
Capital XXXXXXXXXX
Retained Earnings XXXXXXXXXX
Equity 910 1,016 5,965 6,475
Sara also collected some information for the financial year ended 30 June 2017:
Delta Ltd: Account Receivable: $90 m, Inventories: $380 m
Total Equity $700m; Total Assets $740m
Epsilon Ltd: Account Receivable: $300 m, Inventories: $870m
Total Equity $4,000m; Total Assets $6,850m
8 © Didasko 2020. All rights reserved.
Task 1
For the two years ended 30 June 2018 and 30 June 2019, which company have better collection of
eceivables given the credit term for both companies are 10 days? and which company have better inventory
conversion period given the industry standard is 60 days? Ensure you support your answer using
calculation. (20 Marks)
Task 2
For the two years ended 30 June 2018 and 30 June 2019. Which company is more profitable? and which is
financially stretched? Ensure you support your answer using calculation (20 marks)
© Didasko 2020. All rights reserved. 9
Case Study 3 (50 marks)
Marcello’s grandfather gave him $10,000. Answer the tasks that follow. Each task is independent of the
previous task(s).
Task 1
Marcello has the opportunity to invest $100,000 cash in a high interest savings account that pays 3.95%
annual interest.
How much money will be in the account in seven year if the interest is calculated on compounding basis?
How this answer will change if the interest is calculated on simple interest? (10 marks)
Task 2
Marcello is told about a company that is looking to bo
ow funds. The company will pay you $100,000 at the
end of five years.
How much would Marcello be willing to spend today to acquire this investment, if he can earn 6.5% per annum
on an alternative investment of equal risk? Will Marcello eager to spend more money if the other investment
turn out to yield 8% instead? (10 marks)