Ending balance in AUD$ Review Writing - Accounting and Finance Assignment Help

Asssignment Task

Task

Question 1:

From the following selected ending ledger balance extracted from the ledger book of Charlie Retails Pty Ltd. during October 2020. Prepare the following financial statements:

1.    Income Statement; and
2.    Balance Sheet 
3.    Additional information:
 

• Insurance of $1000 has been paid in advance for the whole year 2020-2021.
•  The equipment was bought in October 2019 and has a useful life of 5 years with a salvage value of 500 dollars

Question 2:

Selected information below is provided of two different companies competing in retail clothing industries:

Required:

1. Calculate Return on Asset, Profit Margin and Asset turnover ratio. Provide calculations and compare and interpret each ratio of Bardot and Review in terms of their relative comparative performance. (6+12=18 marks)

2. From your calculation in part (a) explain the different business approaches the two companies have adopted. (3 marks)

3. Explain how increasing the proportion of debt to assets can affect profitability ratios. (

Question 3: Buckley Enterprises operates a single-product entity. Data relating to the product for 2020 were as follows: 

PART A

(i) Calculate total fixed costs and total variable costs per unit.

(ii) Calculate Profit Volume Ratio and break-even units for 2020.
 

(iii) Changes in marketing strategy are planned for 2021. This would increase variable marketing and distribution costs by $15 per unit and reduce fixed non-manufacturing costs by $100,000 per year. Calculate and interpret the units that would need to be sold in 2021 to achieve the same profit as in 2020

PART B

Nikon Furniture Ltd, an office furniture retailer and wholesaler, carries a particular brand of office chair. During the year ended 30 June, the following purchases occurred:

August                                         50 chairs@40
October                                       60 chairs @55
December                                   55 chairs@ 60
March                                         60 chairs @50       

As at 1 July, Nikon furniture Ltd had 18 chairs in inventory, costed $44 per unit. As at 30 June an inventory count revealed 21 chairs in inventory. Compare the value of the office chairs on hand as at 30 June to be included in the inventory balance on the balance sheet under the FIFO inventory method.          

Required:

Calculate value of inventory as at 31 March 2015 under FIFO method of inventory valuation.

Question 4: Answer the following questions.

Treeplant Plantation Pty Ltd is a small manufacturer of tree-based products for sale to wholesalers and retailers in Australia. Production and sales are seasonal with most activities occurring towards the later end of the year as customers build inventory for the summer holiday period. All sales are provided within 30-day credit terms. The cash balance at 1 Jan 2022 is $110,210. The following estimates have been made with respect to the first three months of operation in 2022.

Additional Information:

• Past experience suggest that account receivable usually settle accounts according to the following pattern-
• 50 percent in the month following the sale
• 40 percent in the second month following the sale
• 10 percent in the third month following the sale
• Actual sales for the last three months of 2021 are as follows:

        - $210,000 in October 2021
        - $282,000 in November 2021
        - $303,000 in December 2021

• Treeplant Plantation pays its suppliers of raw materials in the month after purchase. Actual Purchases in December are $120,000.
• The distribution related expenses for March include an amount of $2300 that will not be paid till April.
• The marketing expense for March include an amount of $4200 paid for advertising to be conducted in April.
• The loan interest expense will not be paid until April 2022.
   

Required:

1. Prepare a schedule of cash receipts from account receivables for the month of January, February, and March. (5+2 marks)

2. Prepare the cash budget. 

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