Financial Accounting and Reporting Assignment
Assessment Description
Learning Outcome: Develop information gathering (research) and communication strategies to enable the provision of professional advice to a client.
Objective: The objective of this assignment is to learn to effectively research a technical aspect of accounting and communicate professional advice to a client, via a business letter.
Background to the case study:
Assume that you are a graduate accountant working for Magenta and Associates a public accounting firm situated at 718 Geelong Street, Melbourne, VIC 3000. The manager of your firm, Ms. Lisa Magenta has asked you to draft a letter in response to an email received from a client - Mr. Christopher Sampson, the Managing Director of Beachlife Ltd, raising a number of issues regarding his company - see the copy of the email (attached).
The maximum length of the letter is 1,250 words (excluding any calculations).
Part A: Technical component - This mark covers the technical content of your advice and the explanation on each of the issues, the calculations and the sources used.
Part B: Communication Skills - Letter Writing - This mark covers the generic skills of business letter writing; layout, clear meaning, structure and organisation, appropriate tone and grammar, spelling and punctuation etc.
The assignment is designed to test the following skills:
1. Your knowledge and your ability to research the issues and then apply the information appropriately using judgement to correctly identify the relevant standards and legislation that relate to the issues raised by the client.
2. Your written communication skills - business letter writing.
Re: Accounting Issues: Year Ending 30 June 2018
From: Christopher Sampson
Sent: 13 November 2017
To: Lisa Magenta
Dear Lisa
Thank you for your phone call this morning, as agreed I am emailing you regarding the accounting issues we briefly discussed. By the way to assist the accounting team in our decision-making process could you please make sure you reference any relevant sources relating to your advice, for example, AASBs, Corporations Act, and relevant websites.
1. At our recent board meeting, several directors raised concerns about an intangible asset relating to a brand name 'Sun 'n Surf Shirts' which has been successfully developed by the business over the past decade. The directors want to recognize $800,000 for this asset as at 30 June 2018, being a 'directors' valuation'. Could you please provide advice on the correct presentation of such intangible assets and any potential changes in accounting policy?
2. Our company has recently entered into an agreement to sell equipment to Goodsports Ltd for $90,000 on 1 December 2017. Beachlife Ltd will deliver the equipment on 10 December 2017, with payment due on 30 December 2017.
The agreement states that, from the date of delivery, Beachlife Ltd must provide maintenance for this equipment for the first 12 months. Goodsports Ltd is entitled to a refund of 15% of the amount paid if Beachlife Ltd does not satisfactorily maintain the equipment for the year as required. Beachlife Ltd estimates the fair value of maintaining the equipment throughout the year to be $7500.
The board cannot agree on the appropriate accounting treatment for this sale agreement. Could you please provide advice on the correct presentation of the revenue and related costs?
Please respond by letter (not email) as I would like to present this to the Board. I look forward to hearing from you in the near future.
Regards
Christopher Sampson
Managing Director, Beachlife Ltd
Level 7, 927 William Street,
Brisbane QLD 4000
Hint: Remember that your firm plans to charge the client for your advice; as a check ask yourself if you would pay for the advice you have drafted!
Attachment:- Assignment File.rar