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Assignment of the Week – Financial Accounting

financial-accounting-assignment-help

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.

Our Accounting Services

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.

Assignment Question

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.

Instructions:

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:

  • $5 payable on application
  • $2 payable on allotment
  • $3 payable on call to be made 30th September 2016 The transactions for the period were as 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.

 

Required:

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:

 

Date Particulars Debit Credit


Question 2 (34 marks)
The following information relates to King Kong Ltd:
Financial information
2017 2016
($000) ($000)
Cash 144 139
Inventory 180 160
Accounts Receivable 270 250
Allowance for doubtful debts (30) (35)
Land 150 150
Office Equipment 100 90
Acc. Depreciation – office equipment (20) (30)
Total Assets 794 724
Bank overdraft 20 19
Accounts Payable 200 190
Accrued salaries 22 18
Long term borrowings 90 70
Total liabilities 332 297
Share capital 120 100
Retained earnings 342 327
Total equity plus liabilities 794 724
Sales (all credit no cash) 250 350
Cost of goods sold 130 110
Doubtful debts expense 25 30
Depreciation 10 15
Interest expense 20 30
Salaries 30 25
Profit for the year 35 140
Additional information:

 

  1. Office equipment is acquired during the year at a cost of $30,000 cash.
  2. Some old office equipment was scrapped during the year, which had a cost of $20,000 and accumulated depreciation of $20,000.
  3. Share capital is increased by the bonus issue of 20,000 shares for $1.00 each out of retained earnings.
  4. No dividends were paid during the year.

 

Required:

  1. Prepare the statement of cash flows for the year ended 30/6/2017. (20 marks)
  2. Comment on the cash flow position of the entity as shown in the statement of cash flows. In your analysis, identify any warning signs or areas of strength for the liquidity of the business. (8 marks)
  3. Prepare the following ledger accounts (T-Account format) for 30th June 2017:
a.  Office equipment (3 marks)
b.  Accumulated depreciation – Office equipment (3 marks)

 

Assignment Solution

Our experts provided a High Distinction solution to this assignment.

Solution 1

Journal
Date Particulars Debit Credit
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
Bank Credit 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
Bank Credit 1500
(Being the expenses incurred on reissue of the shares)
31-Mar-17 Share Forfeiture Debit 60000
Bank Debit 160000
Share Capital Credit 200000
Share Reissue Expenses Credit 1500
Bank Credit 18500
(Being the forfeited shares reissued and excess money returned)

Solution 2

Part a

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
Investment Activities
Purchase of Office Equipment -30
Cash from Investing Activities   -30
Financing Activities
Increase in Long-Term Borrowings 20
Cash from Financing Activities   20
Net Changes in Cash/Cash Equivalents   5
Opening Cash   139
Closing Cash   144

 

Part b

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.

Part c

Office Equipment
Dr Cr
Particulars Amount Particulars Amount
Opening Balance 90000 Accumulated Depreciation 20000
Cash 30000 Closing Balance 100000
120000   120000

 

Accumulated Depreciation – Office Equipment
Dr Cr
Particulars Amount Particulars Amount
Office Equipment 20000 Opening Balance 30000
Closing Balance 20000 Depreciation Expense 10000
40000   40000

 

Expert Help from My Assignment Services

My Assignment Services has a dedicated team of Australian accounting experts. They have a sound knowledge of all accounting and auditing standards as set and revised by AASB and IASB. We can set up exclusive one-on-one conversations with our accounting experts to allow smooth exchange of information. We can also share an initial draft of the solution and we promise to revise it any number of times, depending upon your inputs. We provide 24*7 customer service to our customers. Our services are reliable and we provide assignment solutions which are 100% authentic and plagiarism free. To ensure this, we also attach a complimentary Turnitin report with all orders.

Alex, an accounting student from one of the premium Australian universities reached out to us on Monday night. He had the above assignment due on Wednesday, at 9 am. He had planned to do it himself but he had caught the flu and was prescribed complete rest. The deadline was closing in and late submission would have cost him his grade. So, he called our experts. The assignment turned out to be a piece of cake for our financial accounting experts and they delivered it by Tuesday evening itself.

Alex was very happy with the solution and was overjoyed to see the perfect formatting and calculations. In case you are looking for accounting assignment help, you can contact us and receive plagiarism-free solutions.

Author: Mike

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