BUACC590 Accounting Concepts and Practices

The following additional account titles are included in the chart of accounts: Prepaid Insurance Telephone Expense Payable Office Supplies Expense Depreciation Expense Interest Payable The following information is also available:

 

1. A physical count of office supplies reveals that supplies totalling $415 are on hand at 30 June.

2. The balance in the Unearned Consulting Fees account includes $210 earned for services rendered in the last week of June.

3. Estimated depreciation on the office equipment is $2140. Depreciation on the building is $8760.

4. A 12-month insurance policy was purchased on 1 March for $1000 plus GST.

5. The June monthly mortgage payment of $900 has not been paid or recorded. In each payment. $170 is attributable to interest.

6. The June telephone costs for $165 are unrecorded. No tax invoice has been received. 

Required

A. Prepare a LU-column worksheet for the year ended 30 June 2011.

B. Prepare the income statement, balance sheet and statement of changes in equity.

C. Journalise the closing entries. 

1. Review of the corporate governance section of billabong’s website is done as follows;-

• The formation of the billabong’s website is done as per the verified principles of the government and the overall presentation is done considering the parameters required as per the disclosure standards of the industry.
• The details regarding the admission, courses, faculty, services, infrastructure, etc. are provided in detail in order to undertake a comparison between the trends in the past, what are the expectations in future and based upon the same, the comparison on a Y-o-Y basis shall be undertaken.
• With the help of these details it becomes easy for the surfers to obtain the required information and then take up a comparative analysis in order to check if there is any specific trend etc.
• As per the ASX principles the Billabong’s website is a perfect example of an ideal website that provide required details to the people with ease.

1. Review of the community section of billabong’s website is done as follows;-

• In the community section of the website the details regarding the trust and relationship between the employees is provided and hence we can understand regarding the relationship quotient of the students as well.
• These details are very important for the students that are interested in taking the admission in the school and are willing to take up courses from all the streams around and pursue their career.
• These details will help the students so that all the required details can be obtained and thus chances of fraud are reduced.
• The non-financial performance indicators are helpful to get the knowledge about the service initiatives that are taken by the firm and then make up a comparative analysis to check for the probable variances and how will they have an impact on the overall presentation and study as a whole.
• As per the idea, yes it can be said that it is a good example of sustainability reporting.

1. The details regarding the total assets at the end of the last two years are as follows: -

• 30/06/16 – 744.25 million dollars

• 30/06/15 – 803.98 million dollars

We can say that there is a considerable decrease in the overall assets held by the company and the overall reduction is ~7% and this could be due to writing off the assets in the books due to obsolesce, 0 value etc.

1. Billabong cash account showed the following details in the recent financial year:-

• Cash a/c = 68.74

+    Cash and short term investment = 89.17

Total 157.91 million dollars.

The overall cash balance when compared with the year preceding to the last financial year pertains to the fact that the company is able to successfully manage the sources of funds for the intended sources and is able to manage the outcomes as well based upon the requisite sources.

The overall cash management capacity has bettered and this has led to make it a cash generating and sustaining entity as well when compared to previous years.

1. Billabong reported the following the following account payable in the recent financial year:-

• 41 million dollars

When compared with the reported numbers of the year preceding to the most recent financial year, we notice that the creditors cycle has been improved and hence there is an ~8% reduction in the accounts payable. We have been maintaining a DPO (Daily Purchase Outstanding) in line with the industry standards as well. This will be a reason for higher working capital but we can improve the same expectations with the suppliers and receivables as well

1. The sales for the Billabong for last two financial years are as follows: -

• 30/06/16 – 1103.54 million dollars
• 30/06/15 – 1056.13 million dollars

The overall sales for most recent financial year has increased by ~5% due to multiple factors like penetration in new markets, change in the overall policy of the organization, market capture, target audience are few of the many factors which played a vital role in this.

Trends of the financials years till date strive for even better situation of the policies and have set a new expectation for the sales of the organization as a whole.

1. The amount of change in the net profit in the billabong’s profit are as follows:-

• 30/06/16 – 561.16 million dollars
• 30/06/15 – 563.49 million dollars
• Difference-  (-2.33) million dollars

In spite of the increase in the sales, there were multiple parameters which have led to a reduction in the overall profits of the organization. When we compare the increase in these expenses, we see that these are owing to the cash generating side of the company and have led to an overall increase in the spends which has an impact on the income statement as a whole.

In future, we need to ensure and set up some plan to cap the manner in which these spends are being undertaken, how are they being capped and how it can be bettered to cap them in future years as well.