Financial Report (900 words; Word document; structure below)
Requirement - Prepare a
ief report that summarises the financial position of Marvel Landscaping, addressing the following considerations:
a. Financial Statements – include and summarise the Financial Statements from the Excel document (Income Statement, Balance Sheet, Statement of Changes in Equity) You may choose to include the Financial Statements in the main body of the report (Section 2.0), or in the Appendix. Please give them titles and introduce each of them. You should refer to them in the report. They are not included in the word count. It is okay if the figures in your Financial Statements are not the same as the solution or other submissions – you should discuss them based on what your figures are.
. Comment on the financial performance AND financial position of the business after its first year of operations. Refer to your included Financial Statements. What policies or strategies might the business consider changing or adopting to increase its future profits? Again, this should directly refer to the figures in YOUR statements. When discussing financial performance and position, think about the statement that best reflects this information. You may want to lists these as sub-headings in section 2.
c. Marvel Landscaping expects to invest in further assets in the coming year. Briefly describe the depreciation methods available and the main differences and benefits of each. Please answer this question in section 2, with a sub-heading. Break this question down to make sure you answer all parts of it. Look at the depreciation methods and expense that your business has used and provide independent advice. Look back at the lecture slides and textbook for ideas.
d. The business used the weighted average Perpetual inventory method for FY 2018. What other methods could be used and how might they impact on the financial position of the business at the end of the period? Once again, please answer this in Section 2, and consider an appropriate sub-heading. Think about what financial position means and how the different inventory methods might change it. If the business didn’t use weighted average, what method could it used and why might it consider one of these?
e. What internal control mechanisms do you recommend (eg Bank Reconciliation; cash controls)? Refer to the textbook and lecture slides for ideas. Think about the particular business model when you are making recommendations and justify it. Eg ‘It is recommended that the business conduct regular bank reconciliations as a way of ensuring internal control over cash. This recommendation is made on the basis that the business has significant assets held as cash.’
Report Structure: Title Page
Table of Contents – consider making links like has been done in the EXCEL tip sheet. You may want to include any subheadings
1.0 Introduction – should be
ief 1-2 paragraphs XXXXXXXXXXwords. Introduce the business and what this report is
2.0 The Report (use subheadings) – this is the main body and should contain most of the words, XXXXXXXXXXwords. It should have sub-headings (see above) and should answer ALL of the questions at a.-e. above. You must refer to the data found in YOUR financial statements as well as information about the business in the Instructions document.
This section should contain references – see the Harvard Referencing guide in Blackboard for how to do this. You must reference in-text eg ‘accounting controls include the methods and procedures that safeguard assets’ (Nobles et al 2016)
3.0 Conclusion (including Recommendations)- should be one to two paragraphs. It should be based on your findings in the report.
When you answer the questions in the report, you will most likely identify some things the business could or should do eg conduct regular bank reconciliations. It would be a good idea to refer to these recommendations (
iefly) in the conclusion. This could be dot points or in paragraph form.
4.0 List of References – using Harvard Style. You would probably only need a few, perhaps 3 or 4. See the style guide in Blackboard, ask your teacher or academic skills for advice
Eg: Noble, T, Mattison, B, Matsumura, E, Best, P, Fraser, R, Willet, R 2016, Horngren’s Accounting, 8th edn, Pearson Australia, Melbourne.
Appendix (not included in word count) – anything you refer to that might add more substance to your argument but is too bulky for the body. You may choose to include the financial statements here.
Eg Appendix I: Marvel Landscaping Balance Sheet
Microsoft Word - ACC506 ATMC Task 2 Instructions S1 2019.docx
Chalkboard Supplies – Task 2 Instructions 1
ACC506 ATMC Task 2 – Semester 1, 2019
1. ChalkBoard supplies – Introduction
1.1 Introduction
B. Dusty is the sole proprietor of Chalkboard Supplies - a GST-registered independent
office furniture supplies business that began operations on 1 July 2017. The business
focuses mostly on supplying office and study desks to small businesses. It performs some
additional services including deliveries.
Dusty is an astute business owner who prides herself on delivering an excellent service
whilst aiming to grow a profitable and successful business. Towards the end of the
financial year, Dusty employed some staff including a sales assistant and bookkeeper.
Dusty is continuing with the MS Excel spreadsheet system that she has been using to
ecord the accounting transactions and manage her accounts and financial reports.
1.2 Accounting policies and other details
Like all Australian businesses, Chalkboard Supplies uses the financial year: 1 July to 30
June, withholds PAYG for its employees, and pays GST on sales to the Australian
Government. The business uses a GST paid (Asset account) and GST collected (Liability
account) to record its GST. Unless otherwise stated, assume all transaction amounts are
inclusive of GST (10%).
Dusty makes an annual withdrawal of funds from the business for private purposes.
Chalkboard Supplies uses the Accounts listed in the Chart of Accounts.
Chalkboard Supplies uses the accrual accounting method.
Chalkboard Supplies uses a perpetual inventory system with weighted average.
Chalkboard Supplies depreciates computer equipment using reducing balance method at
the rate of 25%.
Chalkboard Supplies depreciates vehicles using straight line method, with a residual
value of $7000 and the end of its effective life of 7 years.
Fortnightly wages, from June 2018, are paid on the Wednesday for the previous fortnight.
Employees work Monday to Friday. (Eg wages paid on 20/6/18, are full fortnight’s pay
for work 4/6/18 to 15/6/18.)
Doubtful debts are adjusted at 30 June each year, such that the provision equates to 5%
of Accounts Receivable balance at the end of the year.
Chalkboard Supplies – Task 2 Instructions 2
1.3 The business records the following transactions in the accounts:
Details
Jul-17 1
B Dusty contributes $67 000 to the business bank account to establish the
usiness.
July 3 Purchase of a Toyota Landcruiser ute (asset) on credit for $ XXXXXXXXXXincl GST).
July 28
Purchased inventory: 12x Workmate desks for $585 each (not incl GST) and
8x Highrise swivel chairs for $175 each (not incl GST). Bought on credit from
Homeworks.
Aug 1
Dusty takes a business loan from Trusty Bank for $ XXXXXXXXXXFunds are
deposited into the business bank account.
Aug 5
Sold 3x Workmate desks on credit to Ace Accountants for $3520 (gross total).
Credit terms 6/15 n30.
Aug 12
Purchased inventory: 18x Workmate desks for $612 each (not incl GST) on
credit from Homeworks.
Aug 19 Received full payment less discount from debtor of Aug 5.
Sept 1
Paid cash for insurance Invoice in the amount of $5500. (Invoice amount
covers insurance for 12months - 1 Sept 17-30 Aug 18, and includes GST).
Sept 2 Paid Homeworks account in full for July/August purchases.
Sept 20
Sold 8x Workmate desks and 3x Highrise Chairs for a total of $16 456 on
credit to a customer, Electrical Training. Credit terms 8/30 n60.
Oct 1 Purchase of a computer system (asset) on credit for $ XXXXXXXXXXincl GST).
Oct 4
Bought 10x Highrise Chairs for $262 each (not incl GST) on credit from
Homeworks. A shortage of steel lead to this sharp increase in stock price.
Oct 9
Performed services (service revenue) including delivery and installation for
$1991 (incl GST) on credit to customers.
Oct 17
Received full payment from Electrical Training for sale of 20 Sept (discount
applies).
Nov 7 Sold 5x Highrise Chairs for $2 629 (incl GST) cash.
Jan 5 B Dusty withdrew XXXXXXXXXXfrom the business.
Mar 12 Paid Homeworks account for purchases in October.
April 1 Purchase of a computer system (asset) on credit for $ XXXXXXXXXXincl GST).
April 23 Bought general supplies for the business. Paid $2640 (incl GST) cash.
June 6
Paid fortnightly wages: sales assistant, A Marker received $525 (net pay)
(PAYG $55).
June 20
Paid fortnightly wages:Marker received $604 (net pay) (PAYG $76); and
Staples received $448 (net pay) (PAYG amount $21).
TRANSACTIONS
Date
Chalkboard Supplies – Task 2 Instructions 3
1.4 Chart of Accounts:
1.5 June & July 2018 calendar dates (for payroll):
Jun-18
Mon Tues Wed Thurs Fri Sat Sun
1 2 3
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
Jul-18
Mon Tues Wed Thurs Fri Sat Sun
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
30 31
Account Name Account Type
Usual
Balance
Cash at Bank Asset Debit
Accounts Receivable Asset Debit
Provision for Doubtful Debts Contra - Asset Credit
Supplies Asset Debit
Inventory Asset Debit
Prepaid Insurance Asset Debit
GST Paid Asset Debit
Vehicles Asset Debit
Accum Dep - Vehicles Contra - Asset Debit
Computers Asset Debit
Accum Dep - Computers Contra - Asset Credit
Accounts Payable Liability Credit
GST Collected Liability Credit
Loan Payable Liability Credit
Interest Payable Liability Credit
PAYG Tax Payable Liability Credit
Wages Payable Liability Credit
B Dusty, Capital Equity Credit
B Dusty, Drawings Equity Debit
Sales Revenue Revenue Credit
Sales Discount Contra - Revenue Debit
Service revenue Revenue Credit
Cost of Goods Sold Expense Debit
Bad Debts expense Expense Debit
Depreciation Expense Expense Debit
Insurance Expense Expense Debit
Inventory Loss Expense Debit
Interest Expense Expense Debit
Supplies Expense Expense Debit
Wages Expense Expense Debit
Profit and Loss Closing Temporary only N/A
Chart of Accounts
Chalkboard Supplies – Task 2 Instructions 4
1.6 Journals, Ledgers and other records
The business uses the following journals and ledgers:
General Journal - to record all