ACCT5014: Preparation of Financial Statements and Report - Corporate Accounting - Accounting Assignment

Internal Code: MAS3499

Intermediate Corporate Accounting

Scenario: Daisy Textiles was registered as a company on 1 July 2012 under the name Daisy Textiles Distribution WA Pty Ltd and is involved in the wholesale distribution of textiles and haberdashery in Western Australia (WA). The company has been operating for 4 years. Inventory is sourced and imported from all around the world for clothes and furnishings. The Company employs’ the services of a customs broker to ensure all import duty costs are minimised and goods entering the county comply with Western Australian Customs Regulations. The Managing Director (MD) of Daisy Textiles is Mrs Rose Gardiner and she is the majority shareholder with 70% of the shares. The remaining 30% is held by her husband Mr Ryan Gardiner (10%) and her two children Ms Iris Gardiner (10%) and son Mr Bryan Gardiner (10%). Mrs Rose Gardiner is listed as the only director of the company. All shares are classified as ordinary shares and dividends are determined at the end of each year by the MD. The MD Mrs Rose Gardiner is also paid a salary of $100,000 per annum. Daisy textiles is classified as a small proprietary company under the requirements of the Corporations Act 2001, as evidenced by operating revenue being less than $25 million, gross assets are less than $25 million and they employ less than 50 staff. [6 full time staff excluding the MD and 9 additional part time staff are currently employed]. Being classified as small, they are not required to prepare financial statements in accordance with Australian Accounting Standards. However they are required to keep sufficient records for financial statements to be prepared and audited if required. The company has been notified in writing in a letter received 8 July 2017 that they are to be audited by the Australian Tax Office in the next 3 months. The company has been asked to provide a full set of financial statements for 2017 prepared in accordance with Australian Accounting Standards. Daisy Textiles currently employs a part-time bookkeeper to pay bills and keep basic financial records. To assist with the preparation of the necessary financial documents, Daisy Textiles has employed you as a Financial Accountant to assist in the preparation of the required financial statements and notes to the financial statements. You work for ABC Accounting Services and have agreed in a written contract dated 15 July 2017 to prepare the requested general purpose financial reports for a set fee of $25,000 or $5,000 a day for 5 days. Questions: Using Microsoft Excel and Word students are required to: 1) Prepare a full set of general purpose financial reports for 2017 (including as many notes and comparatives as possible) using the information and additional information for adjustments provided. This includes a Statement of Profit and Loss and Other Comprehensive Income, Statement of Financial Position, Statement of Equity and Statement of Cash Flows. (Note: comparatives means the current year and previous year data are required on the face of the statements and in the notes). 2) Prepare a concise report for the managing director explaining the financial performance of Daisy’s Textiles Ltd. The report should follow the format of an executive summary and should be no more than 2 pages (using 1 ½ spacing and size 11 font). 3) This assignment can be completed individually or as a small group with 2 members. Both group members are to submit the same assignment online to allow feedback to be provided to both group members. Students MUST clearly identify in their submission their fellow group member. IF students fail to do this, they risk being reported for plagiarism. 4) Students are to assume they need to submit documents that may be required if this was a real client and consulting contract. 5) Assignments are to be submitted via the assignment box link provided in Blackboard. 6) Assignment coversheets are required and will be made available on Blackboard. 7) Students are to submit the following: a. 1 x Excel spreadsheet with all workings and show a clear effort to utilise the functionalities of Excel to ensure information is linked and clearly displayed. (multiple worksheets may be used but they must be clearly labelled to allow the marker to adequately navigate through the data provided. b. 1 x PDF file with signed assignment coversheet, copy of report, final financial statements and notes with comparatives that would be submitted to the MD and any other documents deemed necessary to fulfil the contract.