ACC506 Task information assignment
General information about the assignment:
This part of your assignment is also individual work, so it must be your own work; i.e. it is not a group assignment. If it is believed that you have copied material from another student or any other source without appropriate referencing, the necessary action will be taken under the University’s Student Academic Misconduct Policy: (http://www.usc.edu.au/ explore/ policies – and- procedures/ student- academic misconduct -academic-policy).
You have to submit the assignment electronically via Safe Assignment on the course Blackboard site. If you want to apply for an extension to your submission date, please email Md Hafij Ullah (email@example.com) to explain the circumstances and attach any necessary supporting documentation. Late penalties will be applied for assignments submitted after midnight on the due date without an approved extension. More details on late penalties are provided in the course outline.
Marks will be allocated to each component of the assignment as follows:
Case Study – Part 2B
Your assignment Task – 2B start from that point where you finished Task – 2A. Assume that you are working in Accounting Services Pty Ltd. (ASPL) as an accountant. At the end of each quarter, you are responsible for adjustments, preparation of financial statements, analysis of those statements, and finally reporting to the management. On 30th June 2018, you noticed the following:
- You have identified that an error occurred in recording a transaction for providing
accounting services to a customer on 23rd of June. The accurate amount of services provided was $2 200.
- Salaries to employees remains due $200 (net of $20 PAYG).
- The firm charges depreciation on all of its fixed assets following an approach where initial years charges more depreciation and lower depreciation in the later years. Rates of depreciation are 20% for furniture and 10% for building.
- Only $6 675 of supplies remains in the stock at the end of the quarter.
- The firm maintains a 4% provision on the ending balance of account receivable of each quarter for doubtful debts.
The manager of the firm is concerned about the performance of the firm. He is thinking of changing accounting approaches like depreciation methods, approaches for recognizing uncollectible from account receivable could showing better financial performance.
As an accountant of the firm you may evaluate the performance of the firm based on different ratios including net profit ratio, return on assets, return on equity/ capital, comparative Balance sheet between the quarters, and common-size comparative Balance sheet.
Based on the provided information above, you are required to prepare and present the following:
- Rectify the errors (if any) that you committed in your Task 2A.
- Provide necessary entries for adjusting the Trial Balance at the end of the quarter 30th June,
- As the firm determines financial performance quarterly, close the temporary accounts at the end of the quarter on 30th June by necessary entries.
- Though it is not required but the firm prepares a worksheet quarterly. Prepare a worksheet for ASPL.
- For determining the financial performance and position and for facilitating the analysis of their financial position, James Kate, the manager of ASPL asked you to prepare:
- Income Statement
- Owners’ equity statement
- Balance Sheet
- Comparative Balance Sheet (Trend analysis), and
- Common-size Comparative Balance Sheet
- Calculate the ratios that the manager would like you to calculate
- Prepare a report for the manager and explain-
- whether his concern is right, whether alternative accounting approaches (for depreciation and uncollectible) can help in improving financial performance;
- the ratios of the firm comparing with the standard ratios;
- comparative Balance sheet and common-size comparative Balance sheet; and
- any other issues (like social factors, organizational structure, economic conditions, etc) impacting the performance and ways of overcoming those issues.