7702AFE - Accounting and Reporting With Financial Statement Analysis or Crown Resorts 2020 Annual Report Writing - Accounting Assignment Help

Assignment Task

Crown Resorts 2020 Annual Report
A. Freedom Foods Statement of Profit and Loss & Other Comprehensive Income and its Statement of Cash Flows in its 2019 Annual Report         
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

(i) If the extra $10 million in bad debts had been recognised in 2019 how much of the $10 million would have been reported in the 2019 Cash Flow Statement and why? (dot points permissible)

(ii) identify and explain four (4) items on the Freedom Foods cash flow statement that could be indicators of potential liquidity and risk issues for Freedom Foods.  

(iii) Looking at the Consolidated Statement of Cash Flows for Freedom Foods for the year ended 30th June 2019, explain how the Proceeds from the issue of equity instruments and borrowings appear to have been used. 

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 2. Explain and comment on each of the current and quick ratios both before and after the adjustment for misstatements including if those ratios indicate any liquidity problems?  $10 million write-off of bad debts should have been recognised in the 2019 financial statements.

C. Statement of Financial Position and accompanying notes     
Using the Crown Resorts 2020 Annual Report answer the following:

C1 Property, Plant and Equipment
1.    Which depreciation method recognises a greater amount of depreciation expense in the earlier years of an asset’s life relative to other depreciation methods?
2.    Describe the depreciation method Crown Resorts uses for depreciating property, plant & equipment (PPE). 
3.    Does the company disclose assumed useful lives for depreciation purposes? If so, what are the useful lives of the main categories of PPE.
4.    How is recoverable amount calculated?  How much is this?  
5.    State the total PPE additions, disposals and depreciation expense for the year ended 2020. 
C 2 Intangibles
1.    How are Intangible assets in the form of Casino Licences valued? 
2.    The article Crown Resorts no longer suitable to hold Sydney casino licence, inquiry hears                   published in the Guardian on November 4, 2020 alludes to the possibility of Crown losing its Sydney casino licence. What value is reported by Crown Resorts for the Crown Sydney licence? 
3.    If Crown Resorts were to lose its licence, how would this impact the value of Crown Resorts Intangibles?
4.    Which other items in the Balance Sheet would be impacted if the licence was lost.  
5.    If the casino licence was written off how would this be reported in the Cash Flow Statement?
6.    In the Chairman’s message on page 2 of Crown Resorts annual report, the Chairman states: As one of Australia’s leading tourism, hospitality and gaming companies, the Board of Crown regards its obligation to provide good corporate stewardship with utmost importance. 
You are to comment on how or whether the Chairman’s statement correlates with the accusations in the article Crown Resorts no longer suitable to hold Sydney casino licence, inquiry hears.     

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