ACCOUNTING AND INFORMATION SYSTEMS-
PART A Individual assignment
Question 1
Find the 2010 JB Hi-Fi annual report from the library and answer the following questions:
a. At JB Hi-Fi's year-end, what was the inventory on the balance sheet? What was the cost of sales for the year?
b. Refer to note 1 in the annual report. How is inventory valued?
c. What proportion of total assets was made up of inventory?
d. Calculate inventory turnover and days in inventory for 2010. How does this compare with Fantastic Holdings and Nick Scali on page 284 from Carlon, S., Mladenovic R., Palm, C., Kimmel, P., Kieso , and D. E., Weyandt, J., Accounting: Building Business Skills, 4th Edition, John Wiley & Sons Australia Ltd.
Question 2
Johanna and Jake Berkvom own Campus Fashions. From its inception Campus Fashions has sold goods on either a cash or credit basis, but no credit cards have been accepted. During the past several months, the Berkvoms have begun to question their credit sales policies. First, they have lost some sales because of their refusal to accept credit cards. Second, representatives of two banks have convinced them to accept their credit cards. One bank, City Bank, has stated that (1) its credit card fee is 4% and (2) it pays the retailer 96 cents on each $1 of sales within 3 days of receiving the credit card billings. The Berkvoms decide that they should determine the cost of carrying their own credit sales. From the accounting records of the past 3 years they accumulate these data:
2015 2014 2013
Net credit sales $600 000 $720 000 $480 000
Collection agency fees for slowpaying
customers
2 940 3 000 1 920
Wages of part-time accounts
receivable clerk
4 560 4 560 4 560
Credit and collection expenses as a percentage of net credit sales are as follows: uncollectable accounts 1.6%, invoicing and mailing costs 0.5%, and credit investigation fee on new customers 0.15%. Johanna and Jake also determine that the average accounts receivable balance outstanding during the year is 5% of net credit sales. The Berkvoms estimate that they could earn an average of 10% annually on cash invested in other business opportunities.
Required
Answer the following:
(a) Present calculations for each year showing total credit and collection expenses in dollars and as a percentage of net credit sales.
(b) Determine the net credit and collection expenses in dollars and as a percentage of sales after considering the revenue not earned from other investment opportunities. (Note: The interest revenue lost on the cash held by the bank for 3 days is considered to be immaterial.)
(c) Discuss both the financial and non-financial factors that are relevant to the decision.
Question 3
On 1 July 2012, Engineering Ltd purchased land $1 200 000 and buildings $500 000. The estimated useful life of the buildings was 40 years, with a residual value of nil. On 1 October 2012 machinery was purchased at a total cost of $120 000. The estimated useful life of the machinery was 4 years with an estimated residual value of $9000. Engineering Ltd uses straight-line depreciation for buildings and the diminishing-balance method for machinery. The entity's reporting period ends on 30 June.
Required
(a) Prepare journal entries to record the purchase of the land, buildings and machinery during the year.
(b) Prepare journal entries to record the depreciation expense for the year ended 30 June 2013.
(c) Assume that on 1 July 2013 the entity revalued the land upwards by $200 000 and the buildings downwards by $25 000. Prepare the journal entries for the revaluations.
(d) On 31 December 2013, owing to a change in product mix, the machinery was sold for $50 000. Prepare the journal entry(ies) to dispose of the machinery.
Question 4
The intangible assets information of Elmo Ltd as at 31 December 2013 is presented here:
Patent ($80 000 cost less $8000 amortisation) $ 72 000
Copyright ($64 000 cost less $25 600 amortisation) 38 400
Total $110 400
The patent was acquired in January 2013 and has a useful life of 10 years. The copyright was acquired in January 2010 and also has a useful life of 10 years.
The following cash transactions may have affected intangible assets during 2014: Jan. 2 Paid $13 500 legal costs to successfully defend the patent against infringement by another company. Jan. - June Developed a new product, incurring $180 000 in development costs. A patent was granted for the product on 1 July, and its useful life is equal to its legal life. Sept. 1 Paid $45 000 to a footballer to appear in commercials advertising the entity's products. The commercials will air in September and October. Oct. 1 Acquired a copyright for $200 000. The copyright has a useful life of 50 years.
Required
(a) Prepare journal entries to record the transactions.
(b) Prepare journal entries to record the 2014 amortisation expense for intangible assets.
(c) Calculate the carrying amount of the intangible assets reported in the statement of financial position at 31 December 2014.
(d) Prepare the note to the financial statements on Elmo Ltd's intangible assets as of 31 December 2014.
PART B Group Assignment
Create a fixed assets register for a Fictitious Manufacturing Firm (financial year end = end of June)
PART I. Set up a fixed assets register for this manufacturing firm using Microsoft Excel with the following details:
? The company set up its asset register in year 2010.
? It must include at least four categories of assets.
? In each category of assets, it must have at least 200 items.
? Assets are located in 3 different branches, Melbourne, Sydney and Adelaide.
? It must include the individual asset cost price, asset ID, asset item, date of purchase, depreciation method (straight line or diminishing value), depreciation rate, accumulated depreciation value, and carrying amount (book Value).
? If assets are disposed in the current year, disposal date and disposal value are also needed.
PART II. Set up the solutions for the following queries based on the fixed assets register created in part a (Microsoft Excel functions i.e. filtering, vlookup (hlookup) and pivot tables must be used at least once in the solution).
i. What are the total depreciation expense (from 1 July 2014 to 30 June 2015 only), accumulative depreciation and net asset value at the end of the financial year, 30 June 2015 for the respective assets in each location and category?
ii. Show all the assets in Melbourne branch which were purchased after 30 June 2012 and their respective cumulative carrying amount (book
value).
iii. Predict the depreciation expense and total carrying amount (book value) at the end of June 2016 and at the end of June 2017, assuming
no additional purchase or disposal after 30 June 2015 for each branch (show the subtotal amount for each categories in each branch).
iv. Show all the assets disposed from the Sydney branch in 2014 with their respective accumulative depreciation and carrying amount (book
value).
PART III. Write a short report (maximum 600 words) stating the followings:
? Describe the movement of assets in the company from 2010 to 2015 based on your findings in PART II and justify the choice of depreciation method used.
? Explain how filtering, vlookup (hlookup) and pivot tables in Microsoft Excel help you in your analysis.
PART IV.
Each student must evaluate each team members individually within the team according to the peer evaluation matrix (see below).
Peer Evaluation Matrix
Evaluator's Name: _________________
Team Member being evaluated: ___________________
Category 4 3 2 1 Total Works towards team goal consistently works toward team goals Student works toward team goals most of the time Student works toward team goals all the time Student does not work towards team goals Role Performance Student effectively performs assigned role within the group Student adequately performs assigned role on a consistent basis Student performs assigned role some of the time Student does not perform assigned role within the group Working with others Listens to, shares with, and supports the efforts of others.
Tries to keep people working well together. Usually listens to, shares with, and supports the efforts of others. Does not cause "waves" in the group. Often listens to, shares with, and supports the efforts of others, but sometimes is not a good team member Rarely listens to, shares and supports the efforts of others. Often is not a good team player Attitude Never is publicly critical of the project or the work of others. Always has a positive attitude about others the task(s) Rarely is publicly critical of the project or the work of others. Often has a positive attitude about others and the task(s) Occasionally is publicly critical of the project or the work of others in the group. Usually has a positive attitude about others and the task(s) Often is publicly critical of the project or the work of others in the group. Often has a negative attitude about others and the task(s) Preparedness Brings needed materials to the group discussion and is always ready to work Almost always brings needed materials to the group discussion and is ready to work Almost always brings needed materials to the group discussion but sometimes needs to settle down and get to work Often forget needed materials or is rarely ready to get to work Time Management Routinely uses time well throughout the project to ensure things get done on time. Group does not have to adjust deadlines or work responsibilities because of this person's procrastination Usually uses time well throughout the project, but may have procrastinated on one thing.
Group does not have to adjust deadlines or work responsibilities because of this person's procrastination Tends to procrastinate, always gets things by the deadlines. Group does not have to deadlines or work responsibilities because of this person's procrastination Rarely gets things done by the group to adjust or work responsibilitie because of this person's inadequate time management.