Financial Reporting Principles and Accounting Standards and Auditing
Order ID 53563633773 Type Essay Writer Level Masters Style APA Sources/References 4 Perfect Number of Pages to Order 5-10 Pages Description/Paper Instructions
Financial Reporting Principles and Accounting Standards and Auditing
QUESTION 1 (6 Marks) Bank Reconciliation
The following information is given about Nadak Co.:
- The August 31 balance shown on the bank statement is $9,810.
- There is a deposit in transit of $1,260 at August 31.
- Outstanding cheques at August 31 totalled $1,890.
- A bank charge of $40 for cheques was made to the account during August, as shown on the bank statement. Although the company was expecting a charge, its amount was not known until the bank statement arrived.
- In the process of reviewing the cheques, it was determined that a cheque issued to a supplier in payment of accounts payable of $361 had been recorded as $631.
- The August 31 balance in the general ledger Cash account, before reconciliation, is $8,950.
Required:
Part A: Prepare a bank reconciliation as of August 31, 2011.(4 marks)
Part B: Prepare any necessary adjusting journal entries.(2 marks)
QUESTION 2 (9 Marks) Financial Reporting Principles, Accounting Standards and Auditing, & Sustainability Reporting
Provide short answers to the following:
- What are generally accepted accounting principles?(2 Marks)
- Going concern assumption is one of the key assumptions to financial reports. What is going concern assumption? Why is assumption important in the preparation of financial statements?(4 marks)
- Describe Scope 1 and Scope 2 emissions and provide an example for each of them. (3 marks)
QUESTION 3 Financial Statement Analysis (8 marks)
BPS Ltd, a supplier of telecommunications equipment, retails its products through suburban outlets. Shown below are the calculations of some of its key financial ratios for 2011 and 2012.
2012 2011
Return on Equity 13% 12%
Return on Assets 8% 9%
Profit margin 20 18%
Asset turnover 0.40 0.50
Days in inventory 72 days 55 days
Days in debtors 42 days 42 days
Current ratio 1.6 1.5
Quick ratio 0.7 1.1
Debt-to-Equity ratio 1.4 1.0
Return on Equity Operating Profit after Tax/ Shareholders’ Equity
Return on Assets Operating Profit after Tax/Total Assets
Financial Leverage Total Assets/Total Shareholders’ Equity
Profit Margin Earnings Before Interest and Tax/Sales
Asset Turnover Sales/Total Assets
Days in Inventory Average Inventory/ COGS x 365
Days in Debtors Average Trade Debtors/Credit Sales x 365
Current Ratio Current Assets/Current Liabilities
Quick Ratio Current Assets – Inventory/Current Liabilities
Debt to Equity Ratio Total Liabilities/Total Shareholders’ Equity
Required
Analyse BPS’s profitability, asset management, liquidity and financial structure for 2012 using the ratio information.
QUESTION 4 (15 marks)Control Accounts
Rupert Ltd maintains subsidiary ledgers for debtors and creditors. At 31 May 2014, the debtors control account has a debit balance of $50,120 and the creditors control account has a credit balance of $30,670. An extract of totals from the special journals for the month of June 2014 is as follows:
Credit sales
86,500
Cash sales
6,100
Credit purchases
93,200
Cash received from debtors
67,800
Cash paid to creditors
55,890
Cash purchases
4,300
Discount received from
7,500
creditors
Discount allowed to debtors
3,500
Complete the debtors and creditors control accounts as they would appear in the general ledger.
QUESTION 5 ADJUSTING ENTRIES AND FINANCIAL STATEMENTS (23 Marks)
The following pre-adjusted trial balance has been prepared for Sydney Company as at 30 June 2014 (for the 12 months beginning on 1 July 2013):
DR CR
$ $
Bank Overdraft 10,000
Accounts Receivable 200,000
Allowance for Doubtful Debts 1,000
Inventory 100,000
Prepaid Rent 10,000
Property, Plant and 450,000
Equipment
Accumulated Depreciation – PPE 200,000
Accounts Payable 60,000
Bank loan 50,000
Contributed Capital 310,000
Retained Profit at 1 July 2013 34,000
Sales revenue 4,50,000
Cost of Goods Sold 265,000
Interest Expense 5,000
Wages Expenses 80,000
Rent Expense 5,000
The following information is given which may give rise to year end adjustments:
- Depreciation on Property, Plant and Equipment is provided for on a straight line basis at 10% per annum, and it is assumed that it will have no salvage value.
- The balance in Prepaid Rent relates to the 12 month period from 1 January 2014 to 31 December 2014.
- An ageing analysis shows that $4,000 of Accounts Receivable is estimated to be uncollectible.
- On 30 June 2014, the directors declared a dividend of $5,000, which the shareholders authorised. The dividend is to be paid on 15 September 2014.
- It is discovered that $10,000 cash received during the year and credited to sales are actually related to services to be delivered in July 2014.
- $5,000 of wages relating to June 2014 have not been paid and need to be accrued.
Part A (12 Marks)
Prepare journal entries for the necessary end of period adjustments.
Part B (7 Marks)
Prepare an Income Statement for the year ended 30 June 2014:
Part C (4 Marks)
In the Balance Sheet as at 30 June 2014, what would be the closing balance of retained profits? Show all workings.
QUESTION 6 (15 marks) Inventory
The following information relates to inventory transactions of Promises Ltd for the month ending 30 June 2014:
Date Cash Purchases Cash Sales Balance
1 June 100 units @ $10
10 June 80 units @ $12
18 June 140 units @ $20
25 June 30 units @ $14
30 June 50 units @ $25
Promises Ltd uses FIFO (first-in-first-out) and perpetual inventory control.
Calculate the cost of goods sold based on the costs of units sold. (3 Marks)
Prepare the journal entries for inventory purchases and cost of sales for the month of June 2014. (12 Marks)
3 MARKS FOR THE CALCULATION
4 MARKS: 2 MARKS EACH FOR INVENTORY PURCHASE JOURNALS
4 MARKS FOR COST OF SALES ENTRY 18 JUNE
4 MARKS FOR COST OF SALES ENTRY 30 JUNE
QUESTION 7 (10Marks) Noncurrent assets
On 1 July 2011, Promises Ltd purchased equipment at a cost of $150,000. The equipment is depreciated using the reducing balance method at the rate of 40% per annum.
Prepare the journal entries for depreciation for each year 30 June 2012, 30 June 2013 and 30 June 2014. (9 Marks)
What is the book value of the equipment at 30 June 2014? (1 Mark)
3 MARKS EACH FOR EACH JOURNAL (NO HALF MARKS)
1 MARK FOR BOOK VALUE (ALLOWANCE FOR CARRYFORWARD ERRORS)
Question 8 Management Accounting and Cost Concepts (13.5 marks)
Part A (2 marks)
For each of the items 1-4 in the table below, indicate whether the item is a product cost or a period cost
Item Cost Classification
1)A food retailer purchases milk for resale
2)Depreciation of head office computers
3)Salaries of production line workers for a
manufacturer
4)Advertising costs to promote a manufacturer’s
½ mark each entry
Part B (9.5 marks)
Bandcamp Ltd manufactures guitars. In the month of January 2014, Bandcamp Ltd recorded:
- direct labour cost of $200 000
- raw materials purchased of $400 000
- total overhead cost of $500 000.
The following information was supplied by Bandcamp Ltd’s accountant about the opening and closing inventory:
31 January 1 January
(ending) (beginning)
Raw materials inventory $80 000 $95 000
Work in progress inventory $110 000 $60 000
Finished goods inventory $255 000 $75 000
Required:
- Prepare a cost of goods manufactured statement for January 2014.
- Prepare a cost of goods sold statement for January 2014.
Part C (2 marks)
Tree & Woods Corp., an international furniture company, manufactures and sells furniture of unique natural material. In 2010, the company sold all 25,000 chairs that it produced at $200 each. Total costs amounted to $3,300,000 comprised of $1,300,000 variable costs and $2,000,000 fixed costs. In 2011, the company purchases a new saw mill for $110,000. The useful life is estimated to be 5 years with a salvage value of $10,000. Each year, the same amount of depreciation expense is recorded. The usage of the new saw mill allows Tree & Woods to reduce variable costs for producing one chair by $7. All other costs remain the same as in 2010.
What was Tree & Woods Corp.’s break-even point in number of units in 2010?
Question 9 – MCQ practice questions
You have seen samples of MCQ in the lectures and in your quiz attempts.
RUBRIC
QUALITY OF RESPONSE NO RESPONSE POOR / UNSATISFACTORY SATISFACTORY GOOD EXCELLENT Content (worth a maximum of 50% of the total points) Zero points: Student failed to submit the final paper. 20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. 30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. 40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. 50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. Use of Sources (worth a maximum of 20% of the total points). Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. 5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. 10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. 15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. 20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. Grammar (worth maximum of 20% of total points) Zero points: Student failed to submit the final paper. 5 points out of 20: The paper does not communicate ideas/points clearly due to inappropriate use of terminology and vague language; thoughts and sentences are disjointed or incomprehensible; organization lacking; and/or numerous grammatical, spelling/punctuation errors 10 points out 20: The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors 15 points out of 20: The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. 20 points: The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. Structure of the Paper (worth 10% of total points) Zero points: Student failed to submit the final paper. 3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. 5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements. The student also significantly writes too large or too short of and paper 7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. 10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper. GET THIS PROJECT NOW BY CLICKING ON THIS LINK TO PLACE THE ORDER
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