Accounting and Financial Management - Bryson Pty Ltd Case Study - Accounting Assignment Help

Assignment Task :

Question 1 27 Marks
Bryson Pty Ltd runs a business that provides HR training and placement services. The unadjusted Trial Balance for the current period is given below:

A. You are required to prepare: (i) Income statement (ii) Statement of Changes in Equity (iii) Balance Sheet 

B. You are provided with the report below about performance in 2019 and asked to: 

(i) calculate the same performance percentages based on the 2020 figures (ii) comment on trends and any relationships between figures revealed in 2020 figures 

Cash as a percentage of current assets 36% Total expenses as a percentage of revenue 78% Staff salaries as a percentage of total expenses 64% Training fees revenue as a percentage of total revenue 35% Profit as a percentage of revenue 15% Accounts Receivable as a % of current assets 40% Accounts Payable as a % of current liabilities

Question 2  
On the 1st July 2019 Jerome Ltd recorded at Cash Balance of $500 000 overdraft. The following transactions were undertaken by Jerome Ltd during the financial year ended 30 June 2020. Ignore GST. 
1. Paid cash dividends of $240 000. 
2. Sold for $475 000 used machinery with a carrying amount of $355 000. 
3. Sold a long-term government bond, with a carrying amount of $160 000, for $184 000, including $15 000 accrued interest. 
4. Purchased shares in MBW Ltd to be held as an investment for $400 000 cash.
 5. Paid off a long-term $320 000 loan. Interest paid on this loan $18 000. 
6. Received sponsorship funding $220 000.
 7. Received from customers $1 172 000. 
8. Issued ordinary shares for cash, $800 000. 
9. Paid Wages to Employees $312 000. 
10. Purchased factory machinery, giving $110 000 cash and signing a mortgage loan for $400 000. 
11. Issued 5% debentures to secure funding of $710 000. 
12. Purchased land to be held for future expansion for $850 000 cash.
13. Income Tax paid $92 000. 
14. Paid to Suppliers $679 000. 

Required 
A. Prepare the Cash Flow Statement for Jerome Ltd if the Cash Balance at the beginning  was an overdraft of ($500 000). Show each of the following sections:
(i) cash flow from Operating Activities 
(ii) Cash flow from Investing activities
(iii) Cash flows from Financing Activities 
(iv) Cash balance at end of period 

B. You are given the information below from the Income Statement and Balance Sheet. Use the information to prepare the reconciliation of the net profit with cash flows from operating activities. 
Net Profit $419,000 Depreciation 52,000 Gain on sale of assets 144,000 Decrease in Wages and Taxes payable 56,000 Increase in Accounts Receivable 28,000 Decrease in Supplies 14,000 Increase in Interest Payable 22,000 Decrease in Inventories 31,000 Decrease in Accounts Payable 19,000 

C. Write a brief report evaluating and the cash flows from each of the business’s activities  and comment on the overall cash position of the business. 
 

Question 3 
The following financial data relates to Early Bird Allsports Ltd.

You are required to: 

A. Calculate the ratios listed above for 20X3; 

B. Write a report indicating your thoughts as a manager commenting on what the ratios are revealing in terms of trends in the business and by comparison to the industry; 

C. Some of the departmental managers are concerned that the trend in sales and both the profit margins is not as good as could be. They are pushing to move to more online sales thinking that will lead to a reduction in wages and other costs. After consulting the website of one of the biggest competitors Super Retail Group and reading the summary information contained in the introductory 

Question 4 

Indigo Ltd runs a theme park. It is considering three options for expansion, two of which involve existing sections of the park Astro Land and Adventure Land and the third involves the establishment of a new section of the park Lego Land. The company currently has 72% debt in its capital structure. Capital for the project is rationed to $700 000 after which the company will have to raise the rest of the money if needed. The net cash flows for each option are detailed below. The directors work on a 12% required rate of return. 

B. Discuss 2 benefits and 2 limitations of each of the four investment appraisal methods used. 

C. Rank the projects and write a report recommending which project or projects you would proceed with and why? 

D. If a decision is taken to fund projects requiring more than the $700 000 at hand. You are presented with several alternatives: 

(i) Unsecured business loan with either fixed or variable interest rates from the Commonwealth Bank;

(ii) 7% Debentures secured by a charge over assets;

(iii) Issue new shares to existing shareholders in the form of a rights issue. 

Which method would you choose? In your answer refer to current interest rates and consider the level of costs and risk associated with each alternative. 

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