Question: Please see complete information in the attached file.
1. Required: Write a letter to the chief financial officer of The Wentnor Dairy Company Ltd, including the following:
A. Define a CGU.
B. Explain why impairment testing requires the use of CGUs, rather than being based on single assets.
C. Explain the factors that the chief financial officer should consider in determining the CGUs for The Wentnor Dairy Company Ltd. Pay particular attention to referencing your advice to the relevant paragraphs of the accounting standard.
2. Required: A Calculate the following ratios for 2017 and 2016: Current and Acid Test ratios
Inventory turnover and days in inventory
Gross profit percentage, accounts receivable turnover and days sales in receivables Debt ratio and debt to equity ratio
Rate of return on net sales ratio and rate of return on total assets ratio Asset turnover ratio and the rate of return on ordinary shareholders equity
Dividend yield and dividend payout.
B. Using the ratios calculated in Part A and information gathered from elsewhere in the Annual Reports write a report to a potential investor with your recommendations as to whether Woolworths Limited would make a good investment.
(The report should not be just a re-statement of the ratio calculations but an interpretation of them. Any calculations should be contained within an appendix and not in the body of the report. Remember the report is to a potential investor so the ratios must be of interest to them. Remember a business report will need: a report structure, title (including reference to whom the report is addressed), author, executive summary, introduction, findings, and a conclusion. Marks will also be awarded for presentation, business English, content, and where relevant, references.) (20 marks)
C. As a rule of thumb the Current Ratio for businesses should be 2:1 and the Acid Test between1.5 to 1 How would you explain these ratios for Woolworths Limited when compared to this rule?
3. Required: Explain this note to a reader of the Qantas report. Your explanation should deal with all the elements of a set of financial statements, with the translation methods adopted for each element, including all the component parts of equity, together with description of why foreign exchange differences arise, where they are recognized and where do they get transferred to.
4. Required: A. Prepare a Statement of Cash Flows for Flash in the Pan Ltd for the year ended 30th June 2019 using the direct method.
B. The Statement should be accompanied by all the relevant notes (3 in total) including the indirect method.
Information related to above question is enclosed below:
Attachment:- FinancialAccounting.rar