7702AFE : Accounting and Reporting - Management Assignment Help

Assignment Task:

Task:

A. Freedom Foods Statement of Profit and Loss & Other Comprehensive Income and its Statement of Cash Flows in its 2019 Annual Report (15 Marks-400 words)

1. In relation to Freedom Foods net profit for the year and cashflow, explain four (4) reasons why the amount of net profit and net cash flows might differ.

2. State the total net cash flows for each of the 3 categories of cash flows and the overall net cashflow and cashflow balance. Which category provided most cash inflows? Which category had the greatest outflows? Is this a healthy picture?

3. Recall from Assignment 1 the Freedom Foods article that stated: Mr Gunner said the company was forced to write off an extra $35 million worth of expiring stock, on top of a previously estimated $25 million, after it was discovered it was uneconomical to reprocess the unsold stock into protein powders or other products. The stock dated back to 2017.

(i) In which category would the $60 million of stock purchased in 2017 have been reported in the 2017 Cash Flow Statement ?

(ii) If the $60 million of expiring stock had been written off in 2018 how much of the $60 million would have been reported in the 2018 Cash Flow Statement and why? (dot points permissible)

4. Recall from Assignment 1 the Freedom Foods article that stated: The $830 million company, backed by the billionaire Perich family, also revealed on Thursday that it would need to book an extra $10 million in bad debts after it combed over its accounts and found invoices that were raised but failed to be credited to the health food company

B. Financial Statement Analysis (10 Marks-250 words)
Returning to the misstatements in Freedom Foods 2019 and 2018 financial statements

1. Calculate the following ratios for 2019 and 2018 based on the amounts reported in the 2019 financial statements. Calculate ratios to two decimal places. Then calculate the same ratios after adjusting for the misstatements in the financial statements for 2019 and 2018 comparatives. Recall the amounts of material misstatements were: The $60 million inventory write off should have been recognised for in 2018. The additional $10 million write-off of bad debts should have been recognised in the 2019 financial statements.

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