Accounting assignments can be quite arduous for students, especially when it comes to financial accounting questions. This is primarily because of the complex calculations that need to be done to complete these assignments. Financial accounting is very critical to the functioning of any business. And this the reason why assignments on the subject are designed to be so difficult.
These can either be based on the preparation of various financial statements like balance sheets, cash flow statements, income statements, statements of changes of equity, etc. Another type of assignments can be based on analysing a given set of statements and preparing more statements like a common sized balance sheet. It is as complicated as it sounds and the complexity of these assignments often compel students to avail online accounting assignment help.
My Assignment Services has been providing assignment help to students for over a decade. We have a dedicated team of Ph.D. experts who hold years of experience in financial accounting. They have a comprehensive knowledge of the various concepts of accounting like the conceptual framework and accounting standards as set by the International Accounting Standards Board (IASB) or the Australian Accounting Standards Board (AASB). This helps them in writing High Distinction assignments as they are aware of the ins and outs of the subject.
We are sharing a recent assignment question on financial accounting. The below question was designed to develop the students’ understanding of cash flow statements and accounting for shares and debentures.
Ensure your work is prepared using Word (not excel). This assignment needs to be submitted using Turnitin on Blackboard by the due date above. Late penalties will apply. This is an individual assignment not a group assignment. Sharing of work and answers is not permitted and will be marked as an automatic Fail grade.
Question 1 (26 marks)
Luke Media Ltd was incorporated on 1 July 2016 and issued a prospectus inviting applications for 500,000 ordinary shares at an issue price of $10.
The shares are payable are follows:
31 August 2016: Applications were received for 560,000 shares.
3 September 2016: Applications for 60,000 were rejected by the directors and the application money was returned to the shareholders concerned.
4 September 2016: The Company allotted 500,000 shares to the remaining applicants.
25 September 2016: All the allotment money was received.
30 September 2016: The call was made on the shares, payable by 31 October 2016.
31 October 2016: Call money was received from the shareholders of only 480,000 shares.
31 December 2016: The remaining 20,000 shares were forfeited. The forfeited shares were offered to an investment company at a price of $8.00 per share paid to $10 and the transfer was completed on 31 March 2017. The costs of reissue amounted to $1,500.
The company’s constitution states that any forfeited shares must be refunded to the shareholders.
30 April 2017: These shareholders received a refund for the amount owed to them.
Prepare the general journal entries in the books of Luke Media Ltd to record the above transactions. Provide narrations for all your entries. An example of journal template is given below:
|Question 2||(34 marks)|
|The following information relates to King Kong Ltd:|
|Allowance for doubtful debts||(30)||(35)|
|Acc. Depreciation – office equipment||(20)||(30)|
|Long term borrowings||90||70|
|Total equity plus liabilities||794||724|
|Sales (all credit no cash)||250||350|
|Cost of goods sold||130||110|
|Doubtful debts expense||25||30|
|Profit for the year||35||140|
|a. Office equipment||(3 marks)|
|b. Accumulated depreciation – Office equipment||(3 marks)|
Our experts provided a High Distinction solution to this assignment.
|31-Aug-16||Bank Account Debit||2800000|
|Share Application Credit||2800000|
|(Being the application money for the shares received)|
|3-Sep-16||Share Application Debit||2500000|
|Share Capital Credit||2500000|
|(Being the shares allotted for application money received)|
|4-Sep-16||Share Application Debit||300000|
|(Being the excess application money returned)|
|25-Sep-16||Bank Account Debit||1500000|
|Share Allotment Credit||1500000|
|(Being the allotment money for the shares received)|
|30-Sep-16||Share Call Debit||1500000|
|Share Capital Credit||1500000|
|(being the call on the shares made)|
|31-Oct-16||Bank Debit (480000*3)||1440000|
|Share Call Credit||1440000|
|(Being the money of share call money received)|
|31-Dec-16||Share Capital Debit||200000|
|Share Call Credit||140000|
|Share Forfeiture Credit||60000|
|(Being the unpaid call money shares forfeited)|
|31-Mar-17||Share Reissue Expense Debit||1500|
|(Being the expenses incurred on reissue of the shares)|
|31-Mar-17||Share Forfeiture Debit||60000|
|Share Capital Credit||200000|
|Share Reissue Expenses Credit||1500|
|(Being the forfeited shares reissued and excess money returned)|
|Cash Flow Statement|
|Particulars||Amount (000)||Amount (000)|
|Profit for the year||35|
|Add: Depreciation Expense||10|
|Less: Increase in Inventory||-20|
|Less: Increase in Accounts Receivable||-25|
|Add: Increase in Bank Overdraft||1|
|Add: Increase in Accounts Payable||10|
|Add: Increase in Accrued Salaries||4||-20|
|Cash From Operating Activities||15|
|Purchase of Office Equipment||-30|
|Cash from Investing Activities||-30|
|Increase in Long-Term Borrowings||20|
|Cash from Financing Activities||20|
|Net Changes in Cash/Cash Equivalents||5|
If the cash balance of the company is observed it can be assessed that it has increased in this year as compared to the previous year. The firm has generated cash from operations and the current ratio of the company has also improved in the year 2017 as compared to the year 2016. The company already had a strong current ratio which has further improved in the current year due to which the liquidity position has strengthened. The working capital of the company has increased by almost 12% therefore, it is important to assess that the company does not have an excess working capital invested in the business. The excess working capital would remain idle and would not generate any income for the business.
Therefore, the overall liquidity position has strengthened of the company in the current year but it is also important to ensure that the firm does not have excess working capital employed in the business.
|Opening Balance||90000||Accumulated Depreciation||20000|
|Accumulated Depreciation - Office Equipment|
|Office Equipment||20000||Opening Balance||30000|
|Closing Balance||20000||Depreciation Expense||10000|
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