ACC201e Financial Accounting Assignment 2 – Group-based Assignment January 2017 PresentationACC201e Assignment 2 SIM UNIVERSITY Assignment 2 – Page 2 of 6 Group-based Assignment This assignment is worth 30% of the final mark for ACC201e Financial Accounting. The cut-off date for this assignment is 23 February 2017, 2355 hrs. This is a group-based assignment. You should form a group of 3 members from your seminar group. Each group is required to upload a single report to Canvas via your respective seminar group. Please elect a group leader. The responsibility of the group leader is to upload the report on behalf of the group. It is important for each group member to contribute substantially to the final submitted work. All group members are equally responsible for the entire submitted assignment. If you feel that the work distribution is inequitable to either yourself or your group mates, please highlight this to your instructor as soon as possible. Your instructor will then investigate and decide on any action that needs to be taken. It is not necessary for all group members to be awarded the same mark. Take note of the following format and writing requirements. Marks will be penalised for failure to follow requirements. Format requirements:  Cover page: To include course code, course title, assessment title, names of student, PI number of students.  Font style: Times New Roman.  Font size: 12.  Line spacing: 1.5 lines.  Margins: 1.5 inches for top, bottom, left and right.  Include the page number on each page.  Reference or bibliography at the end (use APA referencing guidelines). Writing requirements:  Your report should be clear and succinct, but not at the expense of excluding relevant details. Highlight points that are relevant to your discussion.  Be mindful of the target audience/reader. Use language appropriate to the reader's expected level of knowledge. For example, if a report is written for a layman, avoid the use of technical jargon where possible. If unavoidable, you need to explain what the terms mean.  Ensure minimal grammatical and typographical errors.  Cite appropriate sources (use APA referencing guidelines).  Include less relevant details as an Appendix (maximum 4 pages).  Good overall presentation of the report. ___________________________________________________________________________ACC201e Assignment 2 SIM UNIVERSITY Assignment 2 – Page 3 of 6 Question 1 For the past few years, Robert Tan has operated his part-time window curtain business from his home. As of 1 March 20X1, Robert decided to move to rented office and to operate his business on a full-time basis. He incorporated his business as RT Services Pte Ltd and entered into the following transactions during March 20X1: 1 March The following assets from his part-time business was transferred into RT Services Pte Ltd: Assets $ Cash 23,000 Accounts receivable 2,100 Inventory 11,000 Office equipment 42,000 There was no liability. 1 March RT Services rented an office and paid 24 month rent of $21,600 in advance. 1 March RT Services paid $1,200 for an office and casualty insurance policies for the whole year. 6 March The Company received $4,000 from a customer as an advanced payment for services to be performed the following month. 7 March The Company received $900 from a customer on account. 9 March The Company made a down-payment of 20% of $1,500 to purchase 2 tables and 8 chairs from Delphi Furnishings. The remaining will be paid upon delivery of the office furniture. 11 March The Company paid $200 for an advertisement in the newspaper which appeared the day before. 13 March The Company sent in a bid for a service contract job amounting to $20,000. The company is likely to be awarded the job as it is the lowest bid. 15 March The Company paid a part-time worker $500 for two weeks of work in helping to set up the office. 17 March The Company performed service for a customer amounting to $5,400. The customer will pay for the service the next month. 19 March The Company purchases $2,000 worth of inventory. 20 March The Company paid telephone bill of $560. 21 March Robert fell sick and went to see a doctor. The medical fee was $56.ACC201e Assignment 2 SIM UNIVERSITY Assignment 2 – Page 4 of 6 22 March The Company paid electricity bill of $400. 23 March The Company performed service for a customer who paid $12,000 cash for the service. 25 March The Company paid salary to Robert. His gross monthly salary is $4,000. The current CPF contribution rate is 20% for employee contribution and 17% for employer's contribution for Robert. 31 March The Company received the delivery of the office furniture from Dephi Furnishing. 31 March The depreciation for the office equipment was determined to be $4,200. 31 March A stock-take was conducted and the inventory was found to be $$9,000. The inventory account was updated immediately. Required: (a) Record the above transactions for RT Services Pte Ltd for the month of March in the general journal. (24 marks) (b) Provide the T-account for Cash. (5 marks) (c) Prepare the trial balance of RT Services Pte Ltd on 31 March 20X1. (5 marks) (d) From the trial balance, prepare: (i) The Statement of Comprehensive Income. (7 marks) (ii) The Statement of Financial Position. (9 marks)ACC201e Assignment 2 SIM UNIVERSITY Assignment 2 – Page 5 of 6 Question 2 The following information revealed the transactions of GH Enterprises Pte Ltd for the month of March: Date Transaction No. of bikes Cost per bike ($) 1-Mar Beginning inventory 10 85.00 4-Mar Purchased 5 87.00 8-Mar Sold 12 11-Mar Purchased 8 89.00 17-Mar Sold 5 21-Mar Sold 3 25-Mar Purchased 4 95.00 28-Mar Sold 2 Required: (a) Using the perpetual system, determine the costs of goods sold and ending inventory under the following methods: (i) FIFO. (ii) LIFO. (iii) Weighted average. (12 marks) (b) Which of the three methods will result in the company reporting the highest income for the month? Explain why that is so. (4 marks) (c) In order to increase income for future months, should you write a memo to the sales manager to encourage the sales of goods that reflect the flow indicated in (b)? For example, if FIFO results in the highest income, should they be encouraged to sell older stock first? (4 marks) Question 3 A sustainable business requires effective planning and financial management. Ratio analysis is a useful management tool that will improve the understanding of financial results and trends over time, and provide key indicators of organizational performance. Management can use ratio analysis to pinpoint strengths and weaknesses from which strategies and initiatives can be formed. Investors may use ratio analysis to measure the results against other companies or make judgments concerning management effectiveness and strategic impact. Select a company you are familiar with or any public listed company in which you are able to obtain financial statements for analysis.ACC201e Assignment 2 SIM UNIVERSITY Assignment 2 – Page 6 of 6 Required: (a) Very briefly describe the company that you have chosen and the background of its Chief Executive Officer (CEO or equivalent). (b) You have been requested to produce a report addressed to the CEO (or equivalent) of the company, commenting on the performance and position of the company. You should highlight improvements and strengths and red flag potential areas of concern and recommend possible 'next-step' actions. Your report should contain at a minimum: an executive summary, the report main body, conclusion, references and an appendix. For the purpose of this report, restrict your discussion to the financial ratios listed below. The financial ratios are to be computed over a 2-year period using financial statements that are as current as possible. Relevant sections of the financial statements should be included in the appendix. The numbers used in your calculation should be circled in red or highlighted in yellow. Merely putting the annual reports in the appendix is not acceptable. Any assumptions made must be reasonable and clearly stated. (i) Inventory turnover. (ii) Accounts receivable turnover. (iii) Accounts payable turnover. (iv) Asset turnover. (v) Return on total assets (ROA). (30 marks) ---- END OF ASSIGNMENT ----