Financial statements, analysing business transactions and financial statement analysis Jessica Smith started a new sole trader business called Tech Solutions on 1 January 2019. The business provides telecommunication services to start-up businesses who want to enhance their network and customer reach. Jessica has asked her accountant, Megan Brown, to complete financial statements and write a business report on the financial health of Tech Solutions in its first year of operation. Next Step has the following account balances as at 31 May 2019; Cash  $94,600 Accounts receivable $22,500 Fixtures and Fittings $30,000 Communication Server $55,000 Accounts payable $17,800 Bank Loan $25,000 Capital $106,000 Income $79,200 Expenses ($25,900)   The following transactions occurred in the last month of the financial year- June 2019.…

Question 1 The accounting profit before tax of Baby Shark Ltd for the year ended 30 June 2019 was $92,550. It included the following revenue and expense items: Accounting fees $5,500 Amortisation of development costs 15,000 Carrying amount of plant sold 30,000 Depreciation expense – equipment 5,500 Depreciation expense – plant 24,000 Doubtful debts expense 8,100 Employee expense 15,400 Entertainment expense 13,200 Goodwill impairment 2,000 Government grant (exempt income) 2,200 Insurance expense 12,900 Proceeds from insurance claim for loss of profits 41,200 Proceeds from sale of plant 33,000 Warranty expense 1,500     The draft statement of financial position as at 30 June 2019 included the following assets and liabilities:   2019 2018 Assets Cash $15,500 $17,500 Trade receivable 35,000 40,500…

Topic: Consolidation worksheet, consolidated financial statements   Task Details: Griffin Ltd is a major Australian company operating in the manufacture of women’s clothing. One of its major competitors is Frank Ltd whose business was established by a French family over 30 years ago. It has won numerous awards for its designs and has established a number of brands that have been successful, especially with the teenage market. In order to expand its business as well as to reduce the number of players in the market, on 1 July 2016 Griffin Ltd acquired all the issued shares (cum div.) of Frank Ltd for $330 000. At this date the equity of   Frank Ltd was as follows: Share capital $200 000 General…

Assume that a firm has prepared the following cost estimates for the manufacture of a sub assembly component based on an annual production of 8,000 units. Direct materials: Per unit: $5 Total: $40,000 Direct labor: Per unit: $4 Total: $32,000 Variable factory overhead applied: $4 Total $32,000 Fixed factory over head applied (150% of direct labor cost) Per unit: $6 Total: $48,000 Total cost: Per unit: $19 Total: $152,000 The supplier has offered to provide the subassembly at a price of $16 each. Two-thirds of fixed factory overhead, which represents executive salaries, rent, depreciation, and taxes, continue regardless of the decision. Should the company buy or make the product?

INTRODUCTION The objective of this Accounting practice set is to provide students with an insight into the process of recording transactions, completing adjusting and closing entries, and preparing financial statements for a retail business. Company Background Luxe Leather Bags Pty Ltd has been operating in Toorak, Victoria, since July, 2013. The company was started by Kent Cognac and operates a business which sells luxury leather bags on a wholesale basis to other bag boutiques on both credit and cash terms. The company's Share Capital consists of 810,000 ordinary shares, issued at $1 each, that are owned by various members of the Cognac family. The company employs a combination of sales and administration staff to operate the business.   Accounting System Information…

Question 1 The accounting profit before tax of Baby Shark Ltd for the year ended 30 June 2019 was $92,550. It included the following revenue and expense items: Accounting fees $5,500 Amortisation of development costs 15,000 Carrying amount of plant sold 30,000 Depreciation expense – equipment 5,500 Depreciation expense – plant 24,000 Doubtful debts expense 8,100 Employee expense 15,400 Entertainment expense 13,200 Goodwill impairment 2,000 Government grant (exempt income) 2,200 Insurance expense 12,900 Proceeds from insurance claim for loss of profits 41,200 Proceeds from sale of plant 33,000 Warranty expense 1,500     The draft statement of financial position as at 30 June 2019 included the following assets and liabilities:   2019 2018 Assets Cash $15,500 $17,500 Trade receivable 35,000 40,500…

Question 1 Financial statement disclosures You are the financial accountant for Superstore Ltd, and are in the process of preparing its financial statements for the year ended 30 June 2018.  Whilst preparing the financial statements, you become aware of the following situations: Superstore Ltd provides a warranty on goods sold for a period of 12 months from the date of sale.  The company has, in the past, always recognised a provision for warranties equal to 5% of sales made during the year.  Due to increasing warranty costs and the number of goods returned under warranty in previous years, the directors met during the financial year (ended 30 June 2018), and decided to increase the provision to 8% of sales made during…

Question 1 Topic 3: Consolidation: Non-controlling interests   On 1 July 2016, Peaceful Ltd acquired 80% of the shares of Serene Ltd on an ex div basis for $305,600. All the identifiable assets and liabilities of Serene Ltd were recorded at amounts equal to their fair values except for: Carrying amount Fair value $ $ Inventories 120,000 130,000 Machinery (cost $200,000) 160,000 165,000   At 30 June 2016, Serene Ltd had recorded a dividend payable of $10,000. The inventory on hand at 1 July 2016 was all sold by 30 November 2016. The machinery had a further 5-year life, but was sold on 1 April 2019. At acquisition date, Serene Ltd reported a contingent liability of $15,000 that Peaceful Ltd considered…

The following employees work for Shy-Fi Contracts Ltd, a public company specialising in contract labour force for different projects in construction industry. The employees are paid an hourly rate, based on their Job Classification level.  If an employee works more than 35 hours, they will be paid the overtime rate for the additional hours. The following table summarises the classifications and level of pay per classification: TABLE A:   Classification Levels Level Hourly pay 1 $        30.00 2 $        40.00 3 $        50.00 4 $        60.00 5 $        65.00 6 $        70.00   The overtime hourly rate is $ 80 per hour for ALL employees, regardless of their classification level. Sky-Fi Contracts Ltd has the following employees:   TABLE B:  …