accounting for managers

accounting for managers

ACC00724 – Accounting for Managers
S3, 2015
Assignment 1 (30 marks)
QUESTIONS 1 (15 MARKS)
The investors of Lennox Surfers P/L have been provided the following financial statements for 2014 and 2015 financial year:
Lennox Surfers P/L
Statement of Financial Performance ended 30 June
2014 ($’000) 2015 ($’000)
Sales 3,600 3,840
Less cost of sales
Opening inventory 320 400
+Purchases 2,240 2,350
-closing inventory 400 500
——- 2,160 —– 2,250
——- ——–
Gross profit 1,440 1,590
Less expenses 1,360 1,500
——– ——–
Net profit 80 90
====== =====

Lennox Surfers P/L
Statement of Financial Position as at 30 June
2014 ($’000) 2015 ($’000)
Current assets:
Bank 8 4
Accounts Receivable 750 960
Inventory 400 500
——- 1,158 ——- 1,464
Non-current assets 1,900 1,860
——– ——–
Total assets 3,058 3,324
===== =====
Current liabilities 390 450
Shareholders’ equity
Paid-up capital 1,650 1,766
Retained earnings 1,018 1,108
——– 2,668 ——– 2,874
——- ——–
Total liabilities and shareholders’ equity 3,058 3,324
====== =====
Required:
Calculate the following ratios and comment on the profitability and efficiency of the business:
Profitability ratios
Net profit margin
Gross profit margin
ROA
Efficiency ratios
Inventory turnover period
Average accounts receivable period
Asset turnover
QUESTIONS 2 (5 MARKS)
In relation to recent corporate crashes, what have been the main lessons/faults associated with the accounting information system and/or process? Explain
Question 3 (10 marks)
For each of the following items, state whether it is either;
Revenue or Expense or Asset or Liability or Equity.
1. A loan to another company
2. Shares issued to the public
3. Inventory purchased last week
4. Depreciation of equipment
5. Provision for long service leave
6. Excess payment to the tax department
7. Shares owned in another company
8. Accounts payable
9. Prepaid insurance premiums
10. Deposit paid by a customer for work yet to be done
11. Credit sales
12. Cash sales
13. Retained profit
14. Advertising
15. Bad debts
16. Dividend declared, not yet paid
17. Singed a contract for a $300,000 building
18. Undertook basic research for $40,000 on a new product
19. Delivered goods to a customer related to credit sales contract
20. Special staff training program related to new regulations cost $10,000
21. Cash purchase of a new computer for $23,000
22. Paid initial payment of $5,000 related to the financial lease of a bus
THE END

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