Accountancy Capstone - Integrated Case Study
This assessment item assesses the following learning outcomes:
Knowledge and Technological Skills (KS)
1.1 Demonstrate and apply integrated discipline (including technical) knowledge across the broad field of business with depth in one or more core business disciplines
Higher Order Thinking (HO)
2.2 Exercise independent judgment and initiative in adapting and applying knowledge and skills for effective planning, problem solving and decision making in diverse contexts.
Teamwork and Self (TS)
1 Exercise self-reflection, responsibility and accountability in relation to own learning and professional practice
1 Preparation of a Financial Dashboard and Reflection
2 Enter year-end Adjusting Journals into MYOB and Print out a revised Profit and Loss Statement and Balance Sheet from MYOB
3 Prepare the 2017 Annual Report for Toy Market Pty Ltd in Microsoft Word
4 Prepare the 2017 Company Income Tax Return and Tax Reconciliation for Toy Market Pty Ltd
5 Professional Approach
6 Academic Conduct
7 Submission Instructions
ASSESSMENT REQUIREMENTS FOR EACH PART
PART 1: Preparation of a Financial Dashboard and Reflection
(a) For the past 10-month period from 1 August 2016 to 30 June 2017, Odette Winter (the contract bookkeeper) has been using MYOB to process transactions for Toy Market Pty Ltd. She has been presenting Elizabeth and Nicole with quarterly Profit and Loss Statements and Balance Sheets of the business.
However, Elizabeth and Nicole do not have an accounting background and readily admit that they struggle to read and understand the MYOB management accounts presented to them by their bookkeeper, Odette. Being more visually orientated, they ask you to prepare a financial dashboard for them. The financial dashboard is to be prepared using the four quarterly figures presented in the EXCEL spreadsheet that is available to download from the AYB 339 Blackboard site.
The financial dashboard for the four quarters is to be prepared in such a way that enables you to present and highlight key financial information, financial ratios and trends of the business over the four quarters in a highly visual way. The financial dashboard should primarily consist of graphs and charts.
Please use the four quarters financial data presented in EXCEL before any adjustments that you make in Part 2 of this case study. In other words, develop a financial dashboard based on Odette's unadjusted figures (ie. before your adjustments).
(b) For each table or graph developed in the financial dashboard, Elizabeth and Nicole ask you to briefly summarise for them what the chart or graph is indicating. Furthermore, please identify any trends or concerns that your financial dashboard has highlighted.
(c) A professional advisor will often advise their clients on range of technical accounting and tax matters. However, in many instances clients do not possess the necessary financial expertise or technical accounting or tax knowledge to completely understand the information/advice provided by the accountant.
Over the course of your QUT degree you have acquired a range of technical and disciplinary skills that will serve you well when advising clients. These clients will come from a variety of backgrounds and, in some cases, will not understand the ‘language and terminology' that you would ordinarily use to explain (at times) complex accounting and tax concepts.
Required:
Identify and explain three (3) strategies that you would adopt in order to simplify the content being delivered to clients.
In other words, what strategies could you implement to simplify the financial advice provided to a client (like Elizabeth and Nicole) where they readily admit that they lack the necessary financial acumen to understand what you are saying?
PART 2:
Enter Year-End Adjusting Journal Entries into MYOB & Print out a revised Profit and Loss Statement and Balance Sheet from MYOB -
a. Students are required to prepare and enter adjusting general journal entries directly into the MYOB data file to take into account all of the relevant and necessary adjustments (please include cents in all of your journal entries).
The MYOB data file is available on the AYB 339 Blackboard site for students to download The MYOB data file was created using MYOB AccountRight Enterprise (Educational Version 19). This version of MYOB is available in the student labs in both B and Z blocks. However, students can use any version of MYOB to open the data file and make adjustments (provided it is version 19 or higher).
It will not be possible to open this MYOB data file if you use the MYOB trial versions available on the MYOB website or any version of MYOB lower than this version.
These entries must be entered and produced using MYOB.
Make sure you use MYOB. Students cannot use other packages like Microsoft EXCEL or Word or any other accounting package, otherwise a mark of zero out of six will automatically be imposed.
b. Adding Account Names to the Chart of Accounts
Please note that students are expected to add additional accounts in the MYOB data file provided on the AYB 339 Blackboard site, as several of your adjusting general journal entries will be made to these new accounts (eg. depreciation expense).
c. Dating your Adjusting General Journal Entries 30 June 2017
Please date all of your adjusting general journal entries 30 June 2017.
Please also include a brief narration of the adjustment in the memo field in MYOB.
d. Printing Adjusting General Journal Entries
Make sure that you only print out your adjusting journal entries and not all of the other journal entries already residing in the MYOB data file that has been provided to you.
e. Accounting Depreciation Entries
For accounting purposes, each individual depreciable asset listed on pages 18 and 19 of this case study should be depreciated over their useful lives based on the following straight-line rates (rate shown in the final column).
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Depreciable Asset
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Accounting Useful Life
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Depreciation Rate (Straight-Line %)
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1. Leasehold Improvements:
§ Fit-out (consisting of floor tiles, ducted air-conditioning, lighting, shelving and signage)
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40 years
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2.5% pa.
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2. Property, Plant and Equipment:
§ Cash register
§ Desktop computers (general)
§ Photocopying machine
§ Facsimile machine
§ Furniture - consisting of freestanding cupboards and shelves
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10 years
4 years
5 years
5 years
10 years
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10% pa.
25% pa,
20% pa.
20% pa.
10% pa.
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3. Computer Software:
§ MYOB AccountRight and retail point of sale software
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5 years
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20% pa.
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4. Leased Motor Vehicle:
§ Leased motor vehicle
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8 years
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12.5% pa.
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There are 8 individual assets (listed above).
Instead of putting through 8 separate depreciation/amortisation journal entries, students are asked to only record four (4) journal entries in MYOB for each of the four classes of assets, namely:
- leasehold improvements (1 asset);
- property, plant and equipment (total of 5 assets);
- computer software (1 asset); and
- leased motor vehicle (1 asset).
This means that you should enter four (4) depreciation/amortisation journal entries into MYOB.
For taxation purposes, being a small business entity (SBE), Toy Market Pty Ltd will depreciate those eligible depreciating assets under Division 328 using the simplified depreciation regime (refer rules on page 29 of this case study).
Print out a Revised Profit and Loss Statement and Balance Sheet from MYOB as at 30 June 2017
Finally, students are required to print out a revised Profit and Loss Statement and Balance Sheet from MYOB for Toy Market Pty Ltd for the year ended 30 June 2017 taking into account their adjusting general journal entries and include it in their submission.
In MYOB, your print range for the Profit and Loss Statement should be 1 July 2016 to 30 June 2017.
For the Balance Sheet, please print this report out as at 30 June 2017.
PART 3: Prepare the 2017 Annual Report for Toy Market Pty Ltd
Students are required to prepare the Annual Report for Toy Market Pty Ltd for the year ended 30 June 2017. The annual report should include the following documents (in the following order):
- the external financial statements excluding the Statement of Cash Flows, but including all of the notes to the accounts;
- the Director's Declaration; and
- the Accountant's Compilation Report.
Which Accounting Standards Apply?
Toy Market Pty Ltd is considered a non-reporting entity. Hence, only special purpose financial statements are required to be prepared.
However, please ensure that the external financial statements (and notes to the accounts) are prepared in accordance with the recognition, measurement and disclosure requirements of all of the AASB Accounting Standards with the exception of the following four (4) AASB Accounting Standards:
- AASB 8 Operating Segments;
- AASB 107 Statement of Cash Flows;
- AASB 124 Related Party Disclosures; and
- AASB 133 Earnings Per Share.
In other words, all other AASB Accounting Standards (including their recognition, measurement and disclosure requirements) must be complied with.
Income Statement
For the Income Statement, Elizabeth and Nicole have requested that you classify expenses by nature instead of by function.
Furthermore, Elizabeth and Nicole only want you to show those expenses on the face of the Income Statement that are specifically required to be disclosed under AASB 101 Presentation of Financial Statements.
d. Statement of Comprehensive Income
When preparing the external financial statements for Toy Market Pty Ltd, please ensure that you prepare and include a Statement of Comprehensive Income in accordance with AASB 101 Presentation of Financial Statements.
e. Statement of Changes in Equity
For the Statement of Changes in Equity, please use the minimum disclosure requirements required under AASB 101 Presentation of Financial Statements.
f. Balance Sheet
For the Balance Sheet, please use the minimum disclosure requirements required under AASB 101.
"Real" and "Model" Financial Statements
Students are advised (and encouraged) to download the 2016 or preferably, the 2017 financial report of an Australian listed public company (preferably a retailer) and review the content, structure and format of the financial report.
Even though listed companies prepare general purpose financial reports as distinct from special purpose financial statements, it will give students an excellent idea as to the layout, format, structure and content of a financial report.
Furthermore, most of the "Big 4" accounting firms also have model financial statements in pdf format, which can be freely downloaded from the firm's websites.
For example, a generic Google search on the term "model financial accounts Australia" will list several hyperlinks to range of accounting firms websites where these model financial statements can be downloaded in pdf format.
However, when preparing the external financial statements for Toy Market Pty Ltd, please do not include the references to AASB paragraphs in the left-hand margin of the financial statements like the model sets of accounts do.
Students should also prepare a Director's Declaration for Elizabeth and Nicole to sign as well as including the appropriate Accountant's Compilation Report.
h. Date of Directors' Declaration and Accountant's Compilation Report
Both the Directors' Declaration and Accountant's Compilation should be dated 3 September 2017.
PART 4: Prepare the 2017 Company Income Tax Return and Tax Reconciliation for Toy Market Pty Ltd
a. Students are required to prepare the company's Income Tax Return & Tax Reconciliation for Toy Market Pty Ltd for the year ended 30 June 2017
Students are required to prepare the 2017 company income tax return of Toy Market Pty Ltd. A blank copy of the 2017 company tax return can be downloaded directly from the ATO website.
A blank copy of the tax return has also been placed on the AYB 339 Blackboard site.
The company's tax file number is: 733 000 152. The business and postal address of Toy Market Pty Ltd is:
9 Parkdale Road Phone: (07) 3327 9780
Carindale, QLD, 4152. Facsimile: (07) 3327 9781
Do not complete the BSB and account details on the second page of the tax return.
For the purposes of the tax agent declaration (on the last page of the tax return), your tax agent number is: 58148-006. Please put your name and contact details in this box.
The income tax return should be dated 3 September 2017. It should be signed by Elizabeth as she is the company's public officer.
There is no need to prepare the dividend franking account for the company or the dividends and interest schedule. Both of these schedules normally form part of the income tax return. However, students are not required to prepare these schedules.
Students are required to prepare a One-Page Tax Reconciliation for Toy Market Pty Ltd for the year ended 30 June 2017
Elizabeth and Nicole also ask you to prepare a one-page tax reconciliation. Students should start this reconciliation summary with the accounting net profit before income tax and then list all relevant adjustments to arrive at the company's taxable income for the year ended 30 June 2017.
This one page reconciliation should be included immediately behind the last page of the company's tax return. There is no need to prepare a deferred tax worksheet for this requirement.
PART 5: Professional Approach to Presentation
This assessment expects a professional approach to presentation similar to that expected in an Accounting firm when delivering documents to a client.
For this reason, you must satisfy the following professional presentation requirements or you will incur penalties as detailed in last section of the criteria sheet.
- A professional approach also means that it is the responsibility of each student to ensure that the complete assignment is submitted by the due date and in the correct format (see below).
- Once submitted, students are not able to attach or submit any additional documentation whatsoever as in a client situation, you would be unable to deliver additional information to a client and late information will be regarded as being late and may not be useful.
PART 6: Academic Conduct in Completing this Assessment
Academic conduct is expected to be ethical and above reproach in producing this assessment in same way you would produce a client document as part of an accounting firm. The following table provides you with clear examples of what constitutes academic misconduct and what does not. Please carefully read this list before starting the assessment.
This integrated case study is an individual assignment. As such, no collaboration with other students is permitted in any way whatsoever. Any collaboration between students, including comparing answers, sharing ideas and research etc. constitutes academic dishonesty.
Markers will be carefully checking case studies to ascertain whether there is any indication that collusion has taken place (particularly those students that were in the same groups during the semester for the PBLs).
PART 7:
Please collate the following documents into one pdf document in the following order:
- Criteria Sheets (on pages 32 and 33);
- Signed Student Integrity Declaration (on page 31);
- Part 1 - Self-Reflection, including the financial dashboard and analysis (on pages 4 and 5);
- Part 2 - Your MYOB Adjusting Journal Entries dated 30 June 2017 including your revised MYOB Profit and Loss Statement and Balance Sheet as at 30 June 2017;
- Part 3 - The 2017 Annual Report of Toy Market Pty Ltd (including the external financial statements, notes to the accounts, the Directors' Declaration and Accountant's Compilation Report) - in that order; and
- Part 4 - The 2017 income tax return of Toy Market Pty Ltd, including the one-page tax reconciliation (at the end of the last page of the tax return).
Attachment:- Capstone Case Study.rar