RECENT ASSIGNMENT

ACC1000
Accounting for Managers
Assignment
Trimester 3, 2014
DUE DATE: Week 7 Friday, 16th January 2015, by 5pm AEST. VALUE: 20% of TOTAL ASSESSMENT
REQUIRED:
All questions must be typed and prepared using Microsoft Word. Hand written assignments will NOT be marked.
You are required to submit this assignment electronically, as a Turnitin assignment. Ensure you save your assignment as advised in the instructions posted on the portal. If you use the wrong format to upload this assignment and the file cannot be opened, it will not be marked. Any work which has been copied or shared between students will result in a Fail grade. This assignment must be your own work.
Question
Marks
1 34
2 10
3 10
Total 54
% 100
Weight 20
Question 1 (34 marks)
The following information relates to Alpine Equestrian Centre as at 30th June 2014:
$
Cash at Bank 357,000
Accounts Receivable 266,800
Inventory (as at 1/7/2013) 175,000
Inventory (as at 30th June 2014) 167,000
Motor Vehicles (at cost, purchased 1/7/2013) 182,000
Office Equipment (at cost, purchased 1/1/2014) 15,000
Accounts Payable 68,500
Selling expenses 6,500
Sales Returns 10,700 Purchases 15,500
Fees income 200,000
Interest income 50,000
Sales 127,500
Finance expenses 10,500 Administration expenses 50,500
Drawings 12,000
Telephone Payable 5,500
Long Term loan 150,000
Additional information:
Depreciation for the year has not been included. Details are:
o Motor Vehicles: Residual value $2,000. Useful life: 10 years o Office Equipment: Residual value $3,000. Useful life: 4 years
The Balance sheet for the previous year, 30th June 2013 reported a total Equity figure of $350,000. The owner contributed capital contributions of $150,000.
Required: Prepare the following using Microsoft word:
(a) Income Statement for the year ended 2014 (14 marks)
(b) Statement of owner’s Equity as at 30th June 2014 (5 marks)
(c) Balance sheet as at 30th June 2014. (15 marks)
Round all answers to zero decimal places.
Question 2 (10 marks)
(a) Ping Pong Limited has provided you with the following information. (5 marks)
2014 2013
$ $
Sales 450,000 575,000
Purchases of Inventory 120,000 135,000
Cash expenses 45,000 40,000
Profit 150,000 250,000
Accounts Receivable 35,000 47,000
Accounts Payable 50,000 55,000
Additional information: Cash expenses $45,000 includes depreciation expense of $5,000.
Using the layout below, prepare the Statement of Cash flows for Operating activities:
Cash flows from operating activities Title
Cash Receipts from customers $
Cash paid to suppliers for inventory $
Cash paid for other expenses $
Net cash from operating activities $
Hint: To maximize your marks, ensure that you show a separate breakdown of your workings for the above totals.
(b) An Income Statement and a Statement of Cash flows provides users with the same information. Do you agree? Explain your answer with reasons and examples of what type of users would use each report. (5 marks)
Question 3 (10 marks)
Tom has just finished his CPA qualification and has been successful in obtaining employment at PCR Hotel Group Limited as the financial accountant. His position involves preparing monthly income statements for each hotel and presenting this to the board of directors, as well as supplying the bank with financial information.
During his first week, Tom noticed the cashier, Toni whispering to Peter, the Finance Director and secretly giving him a handful of cash which had come directly from the hotel takings. Tom spoke with Toni and she said if anyone finds out they would both lose their jobs. Toni also mentioned that Peter is using the money to gamble on the pokies. She said it doesn’t really matter, as Peter always pays the company back when he has a big win.
At the last board meeting, Tom presented the monthly results which included a big loss for a hotel which has a large mortgage with the bank. The directors were very concerned as to how this may affect the bank’s ability to continue lending them cash. After the meeting, Peter instructed Tom to prepare a different Income statement for the bank, and increase the sales by $100,000. Tom thought this should be fine, because Peter is not only the Finance Director, but also acts as the external auditor for the group. So he should know the best practice to follow.
In order to keep Tom’s skills up to date, the company has sponsored Tom to attend the yearly CPA conference. This is a good chance for Tom to learn about the new accounting standards and also network and meet other professionals. Tom met up with another accountant, Jenny who also works in the hospitality industry. After the conference they went out for a drink and started talking about some of their issues at work. Tom trusted Jenny and told her how much money each hotel was making and how worried he was about the hotel that is making a loss. Jenny was very understanding and gave him some advice.
Required:
Discuss with reference to the facts of the above case study, any ethical issues that have been ignored. In your answer, identify the ethical principle, the facts of the case and what action should be taken for each issue.
Use the following table to answer this question:
Ethical Principle Facts of the case Action to be taken