Reference no: EM132364918
Accounting and Financial Management Assignment -
Learning Objectives -
1. Prepare and classify financial data for record- keeping and reporting.
2. Interpret and analyse financial statements to draw conclusions about a business' financial position and performance.
3. Succinctly and effectively communicate accounting information to different audiences.
Problem - On 1st January, 2018 three university students decided to start a company called Deluxe Detailing Pty Ltd and each contributed assets in return for a total $80,000 issued share capital. Ben contributed $25,000 cash. Sunnie contributed $5,000 cash and office furniture $12,000 and computer equipment valued at $8,000. Todd contributed a vehicle valued at $30,000. It was agreed that Sunnie would manage the business in return for a monthly fee of $350 paid on the last day of each month.
Required 1 -
1) Prepare a Balance Sheet for the newly established business.
2) During the month of January the following transactions occurred for Deluxe Detailing P/L.
1. Rented premises with a carwash bay for $1,000 per month, paying 6 months cash in advance.
2. Paid $1,000 for an annual public liability insurance policy.
3. Purchased 12 months advertising costing $600 on account.
4. Hired two students to wash cars on weekends $200 per day each.
5. Purchased cleaning supplies $200.
6. Detailed 12 cars, receiving $700 cash and $200 on account.
7. Sold a book of 10 car wash vouchers to a customer for $800.
8. Purchased fuel for the company vehicle $90.
9. Detailed 16 cars $1,200 cash.
10. Received $200 from account receivable.
11. Paid wages of $1,200.
12. Customer redeemed 1 voucher to have a car detailed.
13. Detailed 2 cars on credit $150.
14. Received bank interest of $12.
15. Paid dividends to shareholders of $1,500.
Required 2 -
1) Record each transaction in the journal (or in a worksheet, if you prefer).
2) Prepare a trial balance.
3) Record all necessary adjustments at the end of January in the journal (or worksheet).
Note: a) Wages of $200 and utility (water and power) of $150 was owing but unpaid at 31st January.
b) The company vehicle has an expected 5 year useful life and a scrap value of $10,000.
Required 3 -
1) Prepare Profit and Loss Statement, an updated Balance Sheet and a Cash Flow Statement for Deluxe Detailing P/L as at 31st January.
2) Reflect on the information provided above and prepare a succinct memo to the shareholders on the financial position (risk) and performance (return) of the business and outlining your advice.
Note - Guide report total 100-200 words, maximum 250, minimum 50 words.