Wesfarmers Limited Financial Analysis

This assignment delves into a comprehensive financial analysis of Wesfarmers Limited. It examines the company's income statement, balance sheet, and key financial ratios like return on equity and working capital ratio. The analysis also includes an assessment of risk mitigation strategies, sustainability practices, and corporate governance adherence. Finally, the assignment provides investment advice to Vikram based on the analyzed financial data.

Running head: ACCOUNTING SYSTEMS AND PROCESSES
Accounting systems and Processes
Name of the Student:
Name of the University:
Author Note:

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ACCOUNTING SYSTEMS AND PROCESSES
Table of Contents
Question 1........................................................................................................................................3
Question 2........................................................................................................................................3
Question 3........................................................................................................................................4
Question 4........................................................................................................................................5
Question 5........................................................................................................................................6
Question 6........................................................................................................................................7
Formula View:...............................................................................................................................10
Question 7......................................................................................................................................13
Question 8......................................................................................................................................18
Revised Data:.................................................................................................................................19
Question 9:.....................................................................................................................................19
Question 10....................................................................................................................................20
Question 11....................................................................................................................................21
Question 12....................................................................................................................................21
Question 13....................................................................................................................................22
Reference List................................................................................................................................26

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ACCOUNTING SYSTEMS AND PROCESSES

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ACCOUNTING SYSTEMS AND PROCESSES
Question 1
Naming cells in spreadsheets
According to the question, naming cells in spreadsheets refers to cell references that are
frequently substituted by names so that it becomes easier to understand the purpose and correlate
with the given statement or calculations. The example given below shows how cells are named in
spreadsheets with proper explanation:
Calculation of Gross Profit:-
Particulars Amount
Sales Revenue 20000
Less: Cost of Goods Sold 5000
GROSS PROFIT 15000
Question 2
Negative numbers
The requirement of this question is to elucidate about the negative numbers and its
presentation in the spreadsheet. The figure below reflects that the negative figures are given in
brackets and is highlighted in red :

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ACCOUNTING SYSTEMS AND PROCESSES
Question 3
Data separation and report areas
It is vital for an accountant to draw spreadsheets with entirely separate data entry as well
as report area in order to minimize errors in the study. The outline of spreadsheet structure can be
defined as one of the important mechanism for ensuring its success in short –term as well as in
long-term (Weil et al., 2013). Spreadsheets facilitates in offering unparalleled flexibility and
power to analyze, increase and optimize performance level and process of decision-making in the
business organization. Moreover, it poses huge risk if incorrect information is generated and thus
leading to bad decision. This risk could be eradicated by noteworthy design and developmental
practices. Hence, it is considered as a vital tool that helps in making work simpler in entering
systematic entries under separate colomns.

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ACCOUNTING SYSTEMS AND PROCESSES
Question 4
IF functions
The requirement of this question is to comprehend IF statement or function, which is also
termed as logical function. The user sets the command by applying this function in order to
identify whether particular conditions are appropriately met. However, if the said condition
relates with given command , then the result will be according to logical value. On the other
hand, if the condition as well as command does not match with each other, then the results varies
from logical value.
PERIOD Particulars Amount Remarks
Jan'16
Sales Revenue, less,
Total Expenses 14000
=IF(C7>0,"NET
PROFIT","NET LOSS")
Feb'16
Sales Revenue, less,
Total Expenses -25000
=IF(C8>0,"NET
PROFIT","NET LOSS")

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ACCOUNTING SYSTEMS AND PROCESSES
Question 5
Periodic systems
Period systems refer to one of the inventory systems in which any update is done on
periodic manner. In addition, this specific inventory system does not require any effort for
maintaining updated records of given inventory or cost of sold goods. In this system, updating of
inventories are done during the end of each term rather than at each sales transaction. For that,
commodities are produced or made available for purpose of selling and estimated by summing
the purchases with closed as well as opening balances.

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ACCOUNTING SYSTEMS AND PROCESSES
Question 6
Normal View:

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ACCOUNTING SYSTEMS AND PROCESSES
Formula View:

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ACCOUNTING SYSTEMS AND PROCESSES
Particulars Amount Amount
Current Assets:
Cash =J8
Accounts Receivable =J9
Closing Inventory =F40
Supplies =J11
TOTAL CURRENT ASSETS =SUM(C95:C98)
Non-Current Assets:
Building =J12
Less: Accumulated Depreciation =-K13 =B102+B103
Furniture =J14
Less: Accumulated Depreciation =-K15 =B104+B105
TOTAL NON-CURRENT ASSETS =SUM(C103:C105)
TOTAL ASSETS =C99+C106
Current Liabilities:
Accounts Payable =K16
Salary Payable =K17
Interest Payable =K18
Unearned Sales Revenue =K19
TOTAL CURRENT LIABILITIES =SUM(C111:C114)
Non-Current Liabilities:
Notes Payable, Long Term =K20
TOTAL NON-CURRENT LIABILITIES =SUM(C116:C118)
TOTAL LIABILITIES =C119+C115
NET ASSETS =C108-C121
Equities:
Capital =K21
Add: Net Profit =K41
=B126+B127
Less: Drawings =-J22 =B128+B129
TOTAL EQUITIES =SUM(C125:C129)
for the period ended….
In the Books of Fancy Footwear
Balance Sheet

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ACCOUNTING SYSTEMS AND PROCESSES
Worksheet and financial reports
Spreadsheet refers to the accounting tools that aids in making estimation in easier way by
applying appropriate formula. Each cell can be either hidden or visible based upon the user’s
requirements. Furthermore, formatting of sheets can be done by applying various font size as
well as text according to initial requirement of topic. Using this data, different graphs as well as
charts are prepared in this spreadsheet.
Question 7
Original Data:
Normal View:
Particulars
Average
Cost FIFO LIFO
Beginning Inventory $3,420 $3,420 $3,420
Net Purchases $7,790 $7,790 $7,790
Cost of Goods Available $11,210 $11,210 $11,210
Ending Inventory $7,583 $8,075 $7,250
Cost of Goods Sold $3,627 $3,135 $3,960
Calculation of Gross Profit:-
Particulars
Average
Cost FIFO LIFO
Sales Revenue $25,000 $25,000 $25,000
Less: Cost of Goods Sold $3,627 $3,135 $3,960
GROSS PROFIT $21,373 $21,865 $21,040
Calculation of Gross Profit:-

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ACCOUNTING SYSTEMS AND PROCESSES
Formula View:
Particulars Average Cost FIFO LIFO
Sales Revenue 25000 =B6 =C6
Less: Cost of Goods Sold 3627 3135 3960
GROSS PROFIT =B6-B7 =C6-C7 =D6-D7
Particulars Average Cost FIFO LIFO
Beginning Inventory 3420 3420 3420
Net Purchases 7790 7790 7790
Cost of Goods Available =B17+B18 =C17+C18 =D17+D18
Ending Inventory 7583 8075 7250
Cost of Goods Sold =B19-B20 =C19-C20 =D19-D20
Calculation of Gross Profit:-
Calculation of Gross Profit:-
Workings:
Date Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount
1-Oct 60 $57 $3,420
3-Oct 10.00 $65 $650 60 $57 $3,420
10 $65 $650
70 $58 $4,070
12-Oct 30 $70 $2,100 70 $58 $4,070
30 $70 $2,100
100 $62 $6,170
18-Oct 70 $72 $5,040 100 $62 $6,170
70 $72 $5,040
170 $66 $11,210
31-Oct 55 $66 $3,627 115 $66 $7,583
Inventory Ledger (Average Method):
Purchase Cost of Goods Sold Balance Inventory

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ACCOUNTING SYSTEMS AND PROCESSES
Date Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount
1-Oct 60 $57 $3,420
3-Oct 10 $65 $650 60 $57 $3,420
10 $65 $650
12-Oct 30 $70 $2,100 60 $57 $3,420
10 $65 $650
30 $70 $2,100
18-Oct 70 $72 $5,040 60 $57 $3,420
10 $65 $650
30 $70 $2,100
70 $72 $5,040
31-Oct 55 $57 $3,135 5 $57 $285
10 $65 $650
30 $70 $2,100
70 $72 $5,040
31-Oct 55 $3,135 115 $8,075
Inventory Ledger (FIFO Method):
Purchase Cost of Goods Sold Balance Inventory
Date Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount
1-Oct 60 $57 $3,420
3-Oct 10 $65 $650 60 $57 $3,420
10 $65 $650
12-Oct 30 $70 $2,100 60 $57 $3,420
10 $65 $650
30 $70 $2,100
18-Oct 70 $72 $5,040 60 $57 $3,420
10 $65 $650
30 $70 $2,100
70 $72 $5,040
31-Oct 55 $72 $3,960 60 $57 $3,420
10 $65 $650
30 $70 $2,100
15 $72 $1,080
31-Oct 55 $3,960 115 $7,250
Inventory Ledger (LIFO Method):
Purchase Cost of Goods Sold Balance Inventory

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ACCOUNTING SYSTEMS AND PROCESSES
Revised Data:
Particulars
Average
Cost FIFO LIFO
Beginning Inventory $5,340 $5,340 $5,340
Net Purchases $8,870 $8,870 $8,870
Cost of Goods Available $14,210 $14,210 $14,210
Ending Inventory $9,498 $9,315 $9,865
Cost of Goods Sold $4,712 $4,895 $4,345
Calculation of Cost of Goods Sold:-
Particulars
Average
Cost FIFO LIFO
Sales Revenue $25,000 $25,000 $25,000
Less: Cost of Goods Sold $4,542 $4,895 $4,345
GROSS PROFIT $20,458 $20,105 $20,655
Calculation of Gross Profit:-
Workings:
Date Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount
1-Oct 60 $89 $5,340
3-Oct 10.00 $85 $850 60 $89 $5,340
10 $68 $680
70 $86 $6,020
12-Oct 30 $83 $2,490 70 $86 $6,020
30 $83 $2,490
100 $85 $8,510
18-Oct 70 $79 $5,530 100 $85 $8,510
70 $79 $5,530
170 $83 $14,040
31-Oct 55 $83 $4,542 115 $83 $9,498
Inventory Ledger (Average Method):
Purchase Cost of Goods Sold Balance Inventory

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ACCOUNTING SYSTEMS AND PROCESSES
Date Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount
1-Oct 60 $89 $5,340
3-Oct 10 $85 $850 60 $89 $5,340
10 $85 $850
12-Oct 30 $83 $2,490 60 $89 $5,340
10 $85 $850
30 $83 $2,490
18-Oct 70 $79 $5,530 60 $89 $5,340
10 $85 $850
30 $83 $2,490
70 $79 $5,530
31-Oct 55 $89 $4,895 5 $89 $445
10 $85 $850
30 $83 $2,490
70 $79 $5,530
31-Oct 55 $4,895 115 $9,315
Inventory Ledger (FIFO Method):
Purchase Cost of Goods Sold Balance Inventory
Date Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount
1-Oct 60 $89 $5,340
3-Oct 10 $85 $850 60 $89 $5,340
10 $85 $850
12-Oct 30 $83 $2,490 60 $89 $5,340
10 $85 $850
30 $83 $2,490
18-Oct 70 $79 $5,530 60 $89 $5,340
10 $85 $850
30 $83 $2,490
70 $79 $5,530
31-Oct 55 $79 $4,345 60 $89 $5,340
10 $85 $850
30 $83 $2,490
15 $79 $1,185
31-Oct 55 $4,345 115 $9,865
Purchase Cost of Goods Sold Balance Inventory
Inventory Ledger (LIFO Method):

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ACCOUNTING SYSTEMS AND PROCESSES
Question 8
Original Data:
Normal View:
Date Particulars Amount
30/4 Bank Balance as per Pass Book $19,670
Add:
Deposit in Transit $1,543
EFT Insurance Payment $300
Book Error Cheque 1419 $340
NSF Cheque from Customer $1,700
Bank Service Charge $40 $3,923
$23,593
Less:
Outstanding Cheques 2462
EFT Rent Receipt 600
Note Receivable $1,500
$4,562
30/04 Cash Account Balance as of 30th April $19,031
Bank Reconcilaition Statement
As on 30th April
Formula View:
Date Particulars Amount
30/4 Bank Balance as per Pass Book 19670
Add:
Deposit in Transit 1543
EFT Insurance Payment 300
Book Error Cheque 1419 340
NSF Cheque from Customer 1700
Bank Service Charge 40 =SUM(D8:D12)
=E6+E12
Less:
Outstanding Cheques =1532+700+230
EFT Rent Receipt 600
Note Receivable 1500
=SUM(D15:D18)
30/04 =IF(E20>0,"Cash Account Balance as of 30th April","Bank Overdraft Balance as of 30th April") =E13-E18
Bank Reconcilaition Statement
As on 30th April

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ACCOUNTING SYSTEMS AND PROCESSES
Revised Data:
Date Particulars Amount
30/4 Bank Balance as per Pass Book $19,670
Add:
Deposit in Transit $10,552
EFT Insurance Payment $6,870
Book Error Cheque 1419 $4,250
NSF Cheque from Customer $18,223
Bank Service Charge $125 $40,020
$59,690
Less:
Outstanding Cheques 30834
EFT Rent Receipt 1050
Note Receivable $8,775
$40,659
30/04 Cash Account Balance as of 30th April $19,031
Bank Reconcilaition Statement
As on 30th April
Question 9:
Dr. Cr.
Date Amount Amount
12/4/2017 Accounts Receivable A/c. Dr. $73,500
To, Sales A/c. $73,500
30/4/2017 Cash A/c. Dr. $36,750
To, Accounts Receivable A/c. $36,750
5/30/2017 Bad Debts Expenses A/c. Dr. $36,750
To, Accounts Receivable A/c. $36,750
15/6/2017 Cash A/c. Dr. $36,750
To, Bad Debt Recoveree A/c. $36,750
Particulars
In the Books of…
Journal Entries

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ACCOUNTING SYSTEMS AND PROCESSES
Question 10
Direct Write-Off Method:
Dr. Cr.
Date Amount Amount
10/5/2017 Bad Debts Expenses A/c. Dr. $3,750
To, Accounts Receivable A/c. $3,750
30/6/2017 Profit & Loss A/c. Dr. $3,750
To, Bad Debts Expenses A/c. $3,750
5/7/2017 Cash A/c. Dr. $3,750
To, Bad Debt Recoveree A/c. $3,750
In the Books of…
Journal Entries
Particulars
Allowance Method:
Dr. Cr.
Date Amount Amount
10/5/2017 Bad Debts Expenses A/c. Dr. $3,750
To,
Provision for Doubtful Debts
A/c. $3,750
10/5/2017
Provision for Doubtful Debts
A/c. Dr. $3,750
To, Accounts Receivable A/c. $3,750
30/6/2017 Profit & Loss A/c. Dr. $3,750
To, Bad Debts Expenses A/c. $3,750
5/7/2017 Accounts Receivable A/c. Dr. $3,750
To,
Provision for Doubtful Debts
A/c. $3,750
5/7/2017 Cash A/c. Dr. $3,750
To, Accounts Receivable A/c. $3,750
Particulars
In the Books of…
Journal Entries

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ACCOUNTING SYSTEMS AND PROCESSES
Question 11
Assessment of a company’s financial position
For understanding the organizational value, it is vital for the investors to overview their
financial position. The financial performance of the organization informs the investors about its
well-being. The analysis of the company’s financial statement facilitates in providing data to
their management. In addition, analytical measurement helps to assess profitability and solvency.
There are various kinds of analytical measurement that is based on numerous factors that
includes organization’s size, capital structure and activities of business. Moreover, these
measures help to evaluate the performance of entities management activities and their financial
outcome of business (Paape and Speklè, 2012).
Question 12
Dr. Cr.
Date Amount Amount
5/7/2017 Accounts Receivable A/c. Dr. $55,000
To, Sales A/c. $55,000
28/7/2017 Notes Receivables A/c. Dr. $55,000
To, Accounts Receivable A/c. $55,000
27/9/2017 Accounts Receivable A/c. Dr. $55,000
To, Notes Receivables A/c. $55,000
5/10/2017 Cash A/c. Dr. $55,000
To, Accounts Receivable A/c. $55,000
In the Books of…
Journal Entries
Particulars

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ACCOUNTING SYSTEMS AND PROCESSES
Question 13
Assessment case study on work integration
Background of Wesfarmers Limited- In this specific case study, it is seen that
Wesfarmers limited expands their operations of business in few areas that includes
improvements in office, departmental stores, energy as well as chemicals.
Comprehensive income statement- It has been noted from the annual report of this
company that profits is contributed to parent member. Moreover, their income statement
reflects that translation reserve is applied for foreign currency and for this the total
amount involved was $15 million (Romney and Steinbart, 2012). It also highlights that at
that time cash flows from their hedge reserve. Hence, comprehensive loss of this entity
for this period records to $78 million.
Dividend refers to the amount that is considered as revenue for the company. In this case,
Wesfarmers limited has paid total dividend of $2600 million in the year 2016. On the
other hand, return on equity illustrates the management efficiency by using equity
financing for the activities of operational fund that are applied by Wesfarmers limited.
Return on Equity
Net Income $407
Shareholder’s Equity $22949
Return on Equity 0.018
From the table given above, it has been seen that Wesfarmers Limited has earned only
$0.018 on equity that is bad for this organization.

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For earnings per share, basic EPS as well as diluted earnings per share was arrived at 36.2%
for the financial year 2016. In this case, basic EPS of this company is estimated by dividing
profit with its parent members by utilizing weighted average value for the share.
As far as mitigation as well as risk is apprehended, this company does not give any guarantee
that the information exists in their financial statement or their annual report is free from any
misstated numbers (Fullerton et al., 2013). For mitigating risk, this organization did not
mention any person for preparing the financial report according to AASB conceptual model.
By apprehending sustainability, it can been seen that Wesfarmers limited is dedicated in
performing consistently for the past few years and this helps in gaining competitive
advantage over its rivals where they can be sustainable in longer period.
As far as corporate governance is apprehended, this company act in accordance with the
suggestions that are subjected for 27th of March 2014 and 3rd edition of ASX corporate
governance.
The company’s income statement reflects that EBIT value is obtained by subtracting the
figures that are given regarding expenses as well as revenues.
Balance sheet
Balance Sheet refers to the financial statement of the company that disclose the financial
ranking of a particular organization.
 Working capital ratio

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ACCOUNTING SYSTEMS AND PROCESSES
 Net Profit after tax

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ACCOUNTING SYSTEMS AND PROCESSES
 Advise to Vikram for investment-It has been advised to Vikram that he must invest
an amount of $50000 in this enterprise as the figures reflects that their financial
performance has been stable due to rise in net profit over the last 5 years . Therefore,
it can been predicted that the organization has the ability to attain more profit in
future. .

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Reference List
Fullerton, R. R., Kennedy, F. A., & Widener, S. K. (2013). Management accounting and control
practices in a lean manufacturing environment. Accounting, Organizations and
Society, 38(1), 50-71.
Paape, L., & Speklè, R. F. (2012). The adoption and design of enterprise risk management
practices: An empirical study. European Accounting Review, 21(3), 533-564.
Romney, M. B., & Steinbart, P. J. (2012). Accounting information systems. Boston: Pearson.
Weil, R. L., Schipper, K., & Francis, J. (2013). Financial accounting: an introduction to
concepts, methods and uses. Cengage Learning.