Reference no: EM132808875

HC1010 Accounting for Business - Holmes Institute

Learning Outcome 1: Obtain and contextualise business information for business accounting to explain and apply different concepts of costs to business decisions;

Learning Outcome 2: Apply, analyse, synthesise and evaluate information from multiple sources to make decisions about the financial performance of entities including assets, liabilities, owner's equity, revenue and expenses;

Prepare, analyse, and interpret transaction data and financial statements for data driven decision- making;

Learning Outcome 3: Evaluate the complex concepts of accounting such as roles and purposes of accounting and preparation of worksheets; and

Learning Outcome 4: Communicate accounting information in writing professionally.

Question 1

In your opinion, should corporate governance practices be included as part of legislation or is it preferable to allow organisations to self-regulate and hence, choose their own suitable corporate governance practices and structures?

Required:
Discuss and provide an appropriate justification.
(Word Limit is 200 - 250 words)

Question 2

Required:
Prepare a balance sheet in a narrative format based on the following list of information, as shown in the table below:

Account	Amount
Owners' Equity	?
Cash	2 700
Accounts payable	43 250
Inventory	31 125
Motor vehicles	18 200
Bank overdraft	33 500
Accounts receivable	2 250
Wages and salaries expenses	5500
Office equipment	4 600
Loan to director	22 000

Question 3
EP Lawyers operates a number of Law firms in Melbourne and Sydney. The following information listed in the table below relates to a number of accounts from the trial balance of EP Lawyers (post adjustments) for the year ending 30 June 2019.

Accounts	$
Accounts payable	96 000
Telephone expense	30 285
Services revenue	663 750
Buildings	650 000
Office equipment	18 000
Cash at Bank	71 020
Advertising expense	30 375
Accounts receivable	108 000
Salaries & Wages	191 700
Mortgage payable	870 000
Office supplies	27 000
Capital	355 885
Office materials expense	137 565
Drawings	67 500
Land	360 000
Rent expense	60 390
Utilities (gas/water, etc.)	71 910

Required:

a) Based on the information provided in the table above, prepare the Income Statement for EP Lawyers.

b) In your own words, explain what the purpose of a statement of comprehensive income is and who do you think would use it? Justify your answer.

(Word Limit: 150 - 250 words)

Question 4
The following information about John Corp. applies to the entity for the year ending 30 June.

Payment to suppliers	150 000
Receipts from owners	405 000
Receipts from long-term borrowing	270 000
Payment of rates	130 000
Payment of wages	125 000
Purchase of land	90 000
Repayment of long-term borrowing	165 000
Receipts from customers	600 000
Payment for equipment	190 000
Depreciation on equipment	90 000

Required:

a) What was John Corp.'s cash flow from the following three (3) activities?
o Operating Activities
o Investing Activities
o Financing Activities
b) In your own words, explain the difference between the cash and accrual basis of accounting.

(Word Limit: 150 - 250 words)

Question 5

The following information shown in the table below relates to Maxi Pty Ltd for the years ending 30 June 20X7 and 30 June 20X8:

Accounts	Year 20X8 $	Year 20X7 $
Total current assets	2,820,000	2,570,000
Total Non-current assets	2,700,000	2,400,000
Total current liabilities	1,770,000	1,350,000
Total non-current liabilities	990,000	1,000,000
Owners' equity	2,760,000	2,600,000
Annual sales Net profit (after tax)	6,100,000 732,000	3,154,350 475,200

Required:

a) Calculate the following financial ratios for Maxi Pty Ltd for the year ending 30 June 20X8
o Net Profit Margin
o Asset Turnover
o Debt to Asset Ratio
o Current Ratio

b) In your own words, discuss three (3) limitations of ratio analysis as an analytical tool.

(Word Limit: 250 - 300 words)

Question 6

Required:
In your own words and by providing appropriate examples, explain the main advantages of identifying cash surpluses and deficits in a cash budget.

(Word Limit: 250 - 300 words)

Attachment:- Accounting for Business.rar