Write a business report (about 600 words) critically addressing the issues below: • Explain the essential differences between perpetual and periodic inventory systems. With the nature of Fashion Haven’s business, which system would you suggest to the owner? Why?
ACC566 - Acc Systems and Processes
Assessment Item 2
In order to work effectively on this assignment, please see the Spreadsheet Advice PDF, the Inventory videos, and the Foot worksheet videos that are available in Interact2.
Part A – 15 marks – Spreadsheet
1. Accountants often use accounting software for data management, why do they still use spreadsheets? What are the disadvantages of using spreadsheets? (7 marks)
2. In designing a spreadsheet, why should the report section be completely separated from the data section? (3 marks)
3. Use spreadsheets to demonstrate:
• IF functions,
• Negative numbers in brackets,
• Names to reference cells (e.g. Net Profit = Sales less Expenses).
You are required to provide at least one reference from the reading resource in Interact2 and two other references.
Part B – 25 marks –
Inventory management Fashion Haven recently opened a retail clothing shop in Australia. The owner is considering whether a perpetual or periodic inventory system should be used. The company also has an item of inventory with details below:
May 1 Opening balance 21 105 5 Purchase 5 102 7 Purchase 15 97 17 Purchase 35 95 31 Inventory on hand 16 Sales revenue for May 10,800
Write a business report (about 600 words) critically addressing the issues below:
• Explain the essential differences between perpetual and periodic inventory systems. With the nature of Fashion Haven’s business, which system would you suggest to the owner? Why?
• Using a spreadsheet, calculate the Ending Inventory and Cost of Goods Sold for May, using the average cost, LIFO, and FIFO methods. Present your answers in both normal and formula views with rows and column headings.
• Taking into account the context of the firm’s operation and the current purchase price, what method would you suggest to the owner, why?
Part C – 20 marks –
Bank reconciliation You are preparing Golf Club’s financial reports for June 2017, and the 30 June 2017 bank statement has just arrived with the balance of $29,930. Currently, Golf Club’s Cash account shows a balance of $30,690.
Additional information: EFT dividend receipt $ 1,050 EFT Rates payment $ 2,520 Bank collection $ 12,502 Dishonoured cheque $ 1,920 Bank service charge $ 250 Deposit in transit $ 12,030 Wrong deduction from the bank $ 520 Interest revenue earned $ 122 Outstanding cheques Cheque no. 256 $ 2,030 Cheque no. 257 $ 520 Cheque no. 258 $ 256
1. Suggest one item that can decrease the bank balance and one item that can decrease the cash balance. The value for both items must be the same. (4 marks)
2. With the new balances, prepare Golf Club’s Bank Reconciliation at 30 June 2017 from the above data. Provide your handwritten solution – scan or use your phone to copy and paste the image in your assignment. You can use a free scanning app such as Camscanner, OfficeLens, or Google Drive. (8 marks)
3. Record any required journal entries from the bank reconciliation. (8 marks)
Part D – 30 marks –
Bad debt management and financial decision Find the Coca-Cola Amatil Limited financial report through the link below: https://www.ccamatil.com/-/media/Cca/Corporate/Files/ASX-Announcements/2018/2017-FullYear-Report.ashx You are an investment advisor with accounting expertise. Write a business report, addressing issues below:
• What was the bad debt method that the company used? How much was their bad debt expense for the year 2017?
• Is there any other method of estimating bad debt? What are their differences?
• Analyse the company financial information through at least three ratios and two charts.For any ratios used, justify why these ratios are relevant to your analysis.
• Comment on the company report on sustainability.
• In your report, you have to provide your advice as to whether your client should invest in the company or not.
Presentation – 10 marks
You are required to provide a quality presentation of the total assignment including referencing throughout and bibliography. Details are listed under the presentation and spreadsheet requirement sections.
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