Section A.
Requires a group to undertake some research, the assignment aims to develop understanding of financial statements and their use in decision-making.
The task is to analyse and compare 2 publicly listed companies specifically in the same industry, (use ASX's website to select a company) and be able to understand the structure of financial statements.
1) The group needs to give a general overview of the company regarding its Mission Statement, Vision Statement and business structure.
2) Review (Compare) the Last 2 years balance sheet (pref: 2011 and 2010) of the 2 companies and indicate the following:
The amount of total current assets
The amount of total non-current assets
The amount of total current liabilities
The amount of total non-current liabilities
The amount of total stockholder's equity
3) Review the most recent year's(pref: 2011 and 2010) income statement and indicate the following:
• total (operating) revenues
• cost of goods sold (if listed)
• total expenses (before income taxes)
• any non-operating (or extraordinary) gains and losses; and
• Earnings per common share.
4) Review the statement of cash flows for the most recent year (pref: 2011 and 2010) and indicate the following:
• net cash inflow (outflow) from operating activities;
• net cash inflow (outflow) from financing activities;
• net cash inflow (outflow) from investing activities; and
• net increase (decrease) in cash during the year.
5) With the information collected from Balance Sheet, Profit and Loss Statement, and cash flow Statement. Conduct a Horizontal Analysis (within) of each company. Identify the Varianceand write a variance report for each of them (Balance Sheet, Profit and Loss Statement, and cash flow Statement).
6) With the information collected from Balance Sheet, Profit and Loss Statement. Conduct a Vertical analysis of the last year 2011 of each company and compare and report on items mentioned in both the reports.
The following transactions occurred in Canberra limited in 2011.
1. Issue share capital for $200,000 cash.
2. Purchased $35,000 of inventory on credit
3. Paid $28,000 to Accounts Payable
4. Sold Inventory costing $60,000 for @270,000. All sales are on Credit.
5. Collected $52,000 from Customers
6. Prepaid $12,000 rent for the year commencing 1 January 2011.
7. Depreciated property and equipment for the year using the straight line method (20 per cent per annum).
8. Dividends declared and paid totalled $30,000
9. Borrowed $100,000 on 1st
July 2010. The loan is due on 30 June 2012 and carries a 10%
interest rate. Paid $4,000 interest on this Loan during 2011.
10. On 1st of November paid $24,000 for an insurance policy covering 1st November 2010 to 31st October 2011.
11. Paid wages of $90,000; wages of $20,000 had been earned but not paid.
12. Received interest of $5000 in cash from the bank. On 31st
December 2011:
1. The unearned revenue account had a balance of $5000
2. Accrued interest revenue had a balance of $2000.
REQUIRED:
1. Prepare journal entries for the above transactions.
2. Prepare Ledgers
3. Prepare closing Entries
4. Prepare a 10 Column worksheet.
5. Prepare an Income Statement and balance sheet for Canberra Limited for the year ending 31st December 2012.