Question 1-
A. A plant manager recently made the following statement at a team meeting:
'No bean counter knows enough about my responsibilities to be of any use to me. As I see it, our accountants may be needed to keep records for shareholders and the Australian Tax Office, but I don't want them sticking their noses in my day-to-day operations.'
Required: As a management accountant, provide a suitable reply to the plant manager.
B. Wayne Deng is reviewing the statement of cash flows for his technology business. The statement has been provided by his accountant. He is dismayed that the statement shows net cash outflows for investing activities.
Required: Discuss if Wayne should be concerned by this.
C. Your doctor knows that you are studying accounting. He has recently received the annual report for a company in which he is a shareholder. The financial report within the annual report is lengthy and your doctor requests your advice as to whether he should contact the company to complain that the financial information is not understandable.
Required: Provide a suitable reply to your doctor.
Question 2-
Luigi and Gina Cicello have decided to lease some newly built premises for the purpose of opening a seafood outlet. They intend to provide a wide range of different products, including a variety of seafood for sale and take-away fish and chips.
Required: Discuss the types of economic decisions Luigi and Gina Cicello will be required to make, and the information they will need to make those decisions. Identify whether Luigi and Gina may require the services of an accountant. Justify your answer.
Question 3-
Sunrise Ltd completed the following transactions during a given year:
|
No.
1
2
3
4
5
6
7
8
9
10
|
Transaction
|
Ratio
|
|
Sold obsolete inventory at cost
|
Profit margin
|
|
Issued a share dividend on ordinary shares
|
Earnings per share
|
|
Declared a cash dividend on ordinary shares
|
Dividend payout
|
|
Paid the GST owing to the tax office
|
Dividend yield
|
|
Purchased inventory on credit
|
Quick ratio
|
|
Sold inventory for cash
|
Current ratio
|
|
Wrote off a bad debt against Allowance for Doubtful Debts
|
Current ratio
|
|
Collected an account receivable
|
Receivables turnover
|
|
Sold inventory on credit
|
Inventory turnover
|
|
Issued additional ordinary shares for cash
|
Debt ratio
|
Required: State whether each transaction would cause the ratio listed with the transaction to increase, decrease or remain unchanged. Justify your answer.