Assignment: Newsletter and financial statements
Task - Complete the 2 questions given below. Now the student needs only Question 1. All workings, where appropriate, must be shown to substantiate your answers.
Question 1 - The regulatory environment and financial reporting
You are employed in a large accounting firm which specialises in preparing general purpose financial reports for large companies that are listed on the Australian Securities Exchange (ASX). As the training manager, one of your key tasks is to prepare a regular newsletter for staff involved in the preparation of the above financial reports. The purpose of the newsletter is to keep staff updated on the latest financial reporting news, alerting staff of changes and developments that may impact their work, and provide enough information to staff to satisfy the following:
- For staff to understand the nature of the news / change / development and its potential impact (so staff can decide whether they need to investigate further given the nature of their own work);
- Provide directions to staff of where they can access further information on the news / change / development if they wish to (including website links where appropriate).
Required: Prepare a 2 page newsletter that identifies and summarises changes / developments and news in the financial reporting environment for the period from 1 May 2017 to 4 August 2017.
Question 2 - Financial statement presentation
The trial balance of Winter Ltd includes the following asset, liability and equity accounts at 30 June 2017:
|
|
DR
$
|
CR
$
|
|
Cash at bank
|
18,200
|
|
|
Cash management account
|
150,000
|
|
|
Accounts receivable
|
123,900
|
|
|
Interest receivable
|
6,700
|
|
|
Inventory
|
212,400
|
|
|
Raw materials
|
100,500
|
|
|
Prepaid rent
|
13,600
|
|
|
Investment property
|
614,000
|
|
|
Loan receivable
|
60,000
|
|
|
Land (at cost)
|
1,100,000
|
|
|
Plant and equipment (at cost)
|
652,200
|
|
|
Accumulated depreciation - plant and equipment
|
|
104,300
|
|
Goodwill
|
68,300
|
|
|
Accounts payable
|
|
75,800
|
|
Allowance for doubtful debts
|
|
14,600
|
|
Current tax liability
|
|
33,500
|
|
Accrued wages payable
|
|
8,200
|
|
Interest payable
|
|
8,300
|
|
Dividends payable
|
|
45,000
|
|
Provision for annual leave
|
|
36,000
|
|
Provision for long service leave
|
|
27,000
|
|
Provision for warranty
|
|
17,000
|
|
Debentures (due April 2020)
|
|
600,000
|
|
Bank loan
|
|
500,000
|
|
Share capital
|
|
500,000
|
|
General reserve
|
|
276,800
|
|
Retained earnings
|
|
873,300
|
|
$3,119,800
|
$3,119,800
|
Additional information:
- All assets other than cash at bank, cash management account, accounts receivable, interest receivable, inventory, raw materials, and pre-paid rent are non-current.
- All liabilities other than accounts payable, allowance for doubtful debts, current tax liability, accrued wages payable, interest payable, dividends payable and provisions listed below are non-current.
- Provision for annual leave includes $19,000 payable within 1 year.
- Provision for long service leave includes $8,000 payable within 1 year.
- Provision for warranty includes $5,000 payable within 1 year.
- In relation to the statement of financial position, where AASB 101 requires entities to disclose further sub-classifications of the minimum line items on the face of the statement or in the notes, the directors of Winter Ltd want to report only the minimum line items on the face of the statement, and leave the sub-classifications to be disclosed in the notes.
Required: Prepare the statement of financial position of Winter Ltd for the year ended 30 June 2017 in accordance with AASB 101, using the line items that a listed company is likely to use. Show all workings. Notes and comparative figures are not required.
Attachment:- Assignment Files.rar