MCD 2060 ASSIGNMENT Accounting college paper writing services

MCD 2060 ASSIGNMENT

 

Due Date: Monday of week 10

This assignment has three questions and contributes 15% to your final mark in the unit. Questions are weighted equally towards the total mark.

 

QUESTION 1

Emily Wineberg has just been employed by the owner of Tagar Enterprises as the Junior Accountant. As one of her first tasks, she has been asked to prepare financial statements for the business under accrual accounting principles. She has been provided with limited information, as shown below:

ASSETS and LIABILITIES at:          30 June 2013      and     30 June 2014:

$                                    $

Cash                                                      51,860                                   ?

Accounts Receivable                             38,150                         49,500

Prepaid Insurance                                 11,000                           8,500

Inventory                                             211,870                       228,550

Accounts Payable                                108,200                       134,160

Accrued Wages                                       2,810                           4,760

Bank Loan (due 2018)                         197,200                                   ?

Machinery and Equipment                   85,000                                   ?

Accumulated Depreciation                   31,500                                   ?

 

Cash paid during the year ended 30 June 2014:  

                                 $

To creditors                                                                    812,000

To staff for wages                                                          459,320

Loan payment (including interest of $25,280)                65,780

For advertising                                                                 57,100

For rent of premises                                                        88,500

For drawings                                                                    66,300

For insurance                                                                   48,510

For other expenses                                                          81,290

 

Cash received during the year ended 30 June 2014:

$

From cash sales                                                          1,311,270

From accounts receivable                                            319,040

From the sale of a machine                                            23,650

 

 

 

MCD 2060 ASSIGNMENT

QUESTION 1

 

Additional data:

 

Depreciation of machinery and equipment is calculated using the straight line method at 12.5% per annum on cost (no residual).

A machine was sold on 30 June 2014. It originally cost $22,500 and was sold for $23,650 cash.  At the time of sale, the machine had accumulated depreciation of $5,000.

The business was having difficulty collecting an amount owing from a credit customer. At 30 June 2014, it was decided to write the customer balance of $19,930 off as a bad debt.

 

Required:

 

Imagine you are Emily Wineberg, in your new position at Tagar Enterprises.

 

• Reconstruct accounts where necessary to prepare the following reports for the year ended 30 June 2014:

 

• an Income Statement;
• a Statement of Changes in Equity;
• a Balance Sheet and
• a Statement of Cash Flows (including Reconciliation of Cash Flows from Operations to Profit/Loss). Show all workings.

 

• Write a brief report summarising any significant items you identified in the reports you prepared in part (a). Maximum 200 words.

 

 

MCD 2060 ASSIGNMENT

 

QUESTION 2

Corrimby Ltd is a company that commenced trading 10 years ago as a sole trader operating in the software industry. Rapid growth and expansion saw the business undertake an initial public offering in 2009. The company currently has 4.9 million fully paid ordinary shares on issue, and just over $9.5 million owed to a finance company for medium-term borrowings. The borrowings attract a variable interest rate and impose a debt covenant on the company of no more than 50%. If a breach is deemed to have occurred, the borrowings must be repaid immediately.

An extract of the balance sheet is detailed below:

Current liabilities                                                 $

Trade and other payables                   410,600

Provisions                                              36,800

Current tax liability                             219,500             666,900

 

Non-current liabilities

Borrowings                                                                  9,650,400

Equity

Share capital                                         9,800,000

Retained earnings                                    225,600

General reserve                                       179,770      10,205,370

20,522,670

 

A prospectus is to be issued in the next month inviting applications for 2 million, 5% irredeemable preference shares to be sold for $3.50 each. The purpose of the share issue is to fund a capital investment to enable the company to use new technology in the development of software which should lead to an increase in market share and growth in profits over the next five years.

Required:

Write a basic report that covers the following:

• The distinguishing characteristics of liabilities and equity.
• Reasons the CEO may have preferred to raise the funds through a loan.
• Reasons the CEO may have preferred to lease the technology.
• Motives for the CEO to issue shares to raise the funds.
• The impact on existing shareholders of the share issue.
• Any other relevant considerations

Your report should be no more than 500 words in length. It should contain an introduction, body, conclusion and references, but does not require an abstract or table of contents.

 

MCD 2060 ASSIGNMENT

 

QUESTION 3

 

Harley Concreting is a large business that provides concreting services for apartments and office buildings under construction. The business reports on a financial year.

The business has Machinery & Equipment, and a number of Heavy Vehicles & Trucks, the carrying amounts of which are detailed below:

Property, Plant and Equipment                   31 March 2013

Machinery & Equipment                    897,600

Less Accumulated Depreciation         (92,690)           804,910

Heavy Vehicles & Trucks                    535,000

Less Accumulated Depreciation         (147,000)         388,000

 

The Machinery & Equipment is used to pump and smooth the concrete and is being depreciated using the units-of-use method based on machine hours. The applicable rate is $15.50 per hour. Management applies the fair value model to the Machinery & Equipment.

The Heavy Vehicles & Trucks are being depreciated using the straight-line method over a period of 6 years with an estimated residual value of $31,000. They were purchased on 1 July 2011. Management applies the cost model to the Heavy Vehicles & Trucks.

At 30 June 2013, the financial statements were being prepared. For the period 1 April 2013 to 30 June 2013, the Machinery & Equipment was used for 1,600 hours and the Heavy Vehicles & Trucks were depreciated as specified.

Fair values and recoverable amounts of the assets at 30 June 2013 were:

Machinery & Equipment – fair value $713,500

Heavy Vehicles & Trucks – value-in-use $362,400, fair value less costs to sell $363,900,

There was no change to the expected life of the assets.

During the year ended 30 June 2014, the Machinery & Equipment was used for a total of 6,250 hours.

Fair values and recoverable amounts of the assets at 30 June 2014 were:

Machinery & Equipment – fair value $702,100

Heavy Vehicles & Trucks – value-in-use $281,875, fair value less costs to sell $287,650.

MCD 2060 ASSIGNMENT

 

QUESTION 3

 

Required:

• Record the general journal entries for depreciation of the Machinery & Equipment and Heavy Vehicles & Trucks for the quarter ending 30 June 2013. Provide narrations and show all workings.
• Record the general journal entries required at 30 June 2013 to adjust the carrying amounts of the assets (where necessary) in accordance with IAS/AASB 116 Property, Plant and Equipment and IAS/AASB 136 Impairment of Assets. You must provide narrations and justify your journal entries with specific reference to relevant accounting standards.
• Record the general journal entries for depreciation of the Machinery & Equipment and Heavy Vehicles & Trucks for the period ending 30 June 2014. Provide narrations and show all workings.
• Record only the general journal entries required at 30 June 2014 to adjust the carrying amounts of the assets (where necessary) in accordance with IAS/AASB 116 Property, Plant and Equipment and IAS/AASB 136 Impairment of Assets.
• Prepare an extract of the balance sheet as at 30 June 2014 to show how the non-current assets would appear at that date based on your answers to parts (a), (b), (c) and (d).

 

 

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