MBS544 Accounting Processes Assignment

Reference no: EM132648713 , Length: word count:1000

MBS544 Accounting Processes Assignment - Murdoch University, Australia

Pets Paradise Pty Ltd

ASSIGNMENT - The firm's in-house accountant has gone overseas for one month. You have been hired by Paula Granger to carry out the accounting duties in the accountant's absence. This assignment provides you with the unadjusted trial balance at the end of May and requires you to record typical transactions for a retail business for the last month of the financial year. Once these transactions have been recorded and posted, you are required to complete the accounting cycle by journalising and posting adjusting and closing entries and preparing financial statements.

REQUIRED -

1. Record the June transactions in the appropriate journal: sales, purchases, cash receipts, cash payments and general. Blank journals, ledgers and financial statements are on LMS under the assignment tab, for you to use to complete the assignment. The assignment is to be typed not hand written as are working papers.

2. Post the journals to the general and subsidiary ledgers. New accounts should be added as needed

3. Record the adjusting journal entries required for the year ended 30 June 2020 in general journal format. You should use brief narrations to explain your entries. Use the worksheet provided in the blank documents to record the adjusting entries and prepare financial statements for checking.

4. Prepare the following:

a. A fully classified Income Statement for the year ended 30 June 2020. This Statement must also show comparative figures for the previous year.

b. A fully classified Balance Sheet as at 30 June 2020. This statement must also show the comparative figures for the previous year.

These financial statements should be typed and professionally presented.

5. Prepare a post-closing trial balance, and determine whether the subsidiary ledgers agree with the control accounts in the general ledger

6. A potential investor interested in purchasing shares in the company has approached you to undertake an analysis of the financial statements you have prepared in part 2 above.. As part of this analysis, you are required to:

a. Calculate the following ratios for both 2019 AND 2020. You are required to compare the results for the 2 years and also compare with the industry average.

b. RATIO INDUSTRY - AVERAGE

i. Return on equity 8%

ii. Profit margin 7%

iii. Current ratio 2:1

iv. Debt to total assets 35%

v. Average collection period 15 days

c. Discuss the results of your ratio calculations performed in part (a) above and the trend in the profitability, liquidity and solvency of the company over the past 2 years compared with the industry average.

d. Provide a recommendation to your investor friend whether they should invest in the company or not. Provide reasons for your recommendation.

e. As part of your analysis, explain how industry average ratios can be obtained and the drawbacks to using industry averages as a standard for comparison.

Your answer should be professionally presented and typed not hand-written and discussion should NOT exceed 1,000 words (include a word count for this section).

Attachment:- Accounting Processes Assignment File.rar

Reference no: EM132648713

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