Wesfarmers Limited Investment Analysis
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AI Summary
This assignment analyzes the financial performance of Wesfarmers Limited, focusing on key ratios such as net profit after tax and the working capital ratio. It examines historical data and trends to assess the company's profitability and financial stability. The analysis culminates in a recommendation regarding the suitability of investing in Wesfarmers based on its current financial standing and potential for future growth.
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Running head: ACCOUNTING SYSTEMS & PROCESSES
Accounting Systems & Processes
Name of the Student
Course Code
Accounting Systems & Processes
Name of the Student
Course Code
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1
ACCOUNTING SYSTEMS & PROCESSES
Answer to question 1
Renaming Cell Address
Here, D34 cell is denoted as Net profit cell after renaming option.
Net profit = Operating profit - Taxes
ACCOUNTING SYSTEMS & PROCESSES
Answer to question 1
Renaming Cell Address
Here, D34 cell is denoted as Net profit cell after renaming option.
Net profit = Operating profit - Taxes
2
ACCOUNTING SYSTEMS & PROCESSES
Answer to question 2
Negative Value
Here, Operating profit has been denoted as negative value which is identified by numbers
in brackets and highlighted in red color.
ACCOUNTING SYSTEMS & PROCESSES
Answer to question 2
Negative Value
Here, Operating profit has been denoted as negative value which is identified by numbers
in brackets and highlighted in red color.
3
ACCOUNTING SYSTEMS & PROCESSES
Here operating profit is in negative value. So the highlighted figure is highlighted in red and in
brackets.
Answer to question 3
The two halves of a spreadsheet are the data area and the report part, along with the
formulae. Data is written in a sequence in the excel sheet, other than this, data collected by a
person is calculated after applying different formulae (Deegan, 2012). In the report area, IF
function is used. Hence, the data is changed in the first half and the whole calculation is done in
report area.
For example, expense data and sales data are given in the data area with its respective
values. However, to calculate the net income based on the provided data, one column is added by
easily using formula. The following method is depicted in the screenshots given below:
ACCOUNTING SYSTEMS & PROCESSES
Here operating profit is in negative value. So the highlighted figure is highlighted in red and in
brackets.
Answer to question 3
The two halves of a spreadsheet are the data area and the report part, along with the
formulae. Data is written in a sequence in the excel sheet, other than this, data collected by a
person is calculated after applying different formulae (Deegan, 2012). In the report area, IF
function is used. Hence, the data is changed in the first half and the whole calculation is done in
report area.
For example, expense data and sales data are given in the data area with its respective
values. However, to calculate the net income based on the provided data, one column is added by
easily using formula. The following method is depicted in the screenshots given below:
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4
ACCOUNTING SYSTEMS & PROCESSES
Step 1
Step 2
ACCOUNTING SYSTEMS & PROCESSES
Step 1
Step 2
5
ACCOUNTING SYSTEMS & PROCESSES
Answer to question 4
IF Function
ACCOUNTING SYSTEMS & PROCESSES
Answer to question 4
IF Function
6
ACCOUNTING SYSTEMS & PROCESSES
Many YouTube videos show the real functionality of the IF function and its usage as
well. As per the video shown in the above image , IF function displays a particular case created
in the data table that also shows a result whether it is true or not. With the help of a cursor, the
complete functionality of IF has been shown in the above YouTube channel.
Answer to question 5
Periodic systems
Periodic Inventory System is a system which updates the inventory after the end of a
particular period of time. Monitoring through this system of inventory keeps a track of the details
of goods in an inventory of a fixed period (Deegan, 2012). It is not required to keep the record of
each data updated for the inventory nor the prices of the sold goods. Accounting done through
this system generally helps in the journal entries of a specific time period.
ACCOUNTING SYSTEMS & PROCESSES
Many YouTube videos show the real functionality of the IF function and its usage as
well. As per the video shown in the above image , IF function displays a particular case created
in the data table that also shows a result whether it is true or not. With the help of a cursor, the
complete functionality of IF has been shown in the above YouTube channel.
Answer to question 5
Periodic systems
Periodic Inventory System is a system which updates the inventory after the end of a
particular period of time. Monitoring through this system of inventory keeps a track of the details
of goods in an inventory of a fixed period (Deegan, 2012). It is not required to keep the record of
each data updated for the inventory nor the prices of the sold goods. Accounting done through
this system generally helps in the journal entries of a specific time period.
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ACCOUNTING SYSTEMS & PROCESSES
ACCOUNTING SYSTEMS & PROCESSES
8
ACCOUNTING SYSTEMS & PROCESSES
Answer to question 6
Part A:
ACCOUNTING SYSTEMS & PROCESSES
Answer to question 6
Part A:
9
ACCOUNTING SYSTEMS & PROCESSES
Part B:
Normal View
ACCOUNTING SYSTEMS & PROCESSES
Part B:
Normal View
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10
ACCOUNTING SYSTEMS & PROCESSES
Formula View
ACCOUNTING SYSTEMS & PROCESSES
Formula View
11
ACCOUNTING SYSTEMS & PROCESSES
Part C:
Normal View
ACCOUNTING SYSTEMS & PROCESSES
Part C:
Normal View
12
ACCOUNTING SYSTEMS & PROCESSES
Formula View
ACCOUNTING SYSTEMS & PROCESSES
Formula View
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13
ACCOUNTING SYSTEMS & PROCESSES
Changes in six data in 10 Column Sheet
Normal View
ACCOUNTING SYSTEMS & PROCESSES
Changes in six data in 10 Column Sheet
Normal View
14
ACCOUNTING SYSTEMS & PROCESSES
Formula View
ACCOUNTING SYSTEMS & PROCESSES
Formula View
15
ACCOUNTING SYSTEMS & PROCESSES
Part D:
To,
The Senior Manager
This is to bring your cognizance to the commonly made mistakes when implementation
of a corporate spreadsheet is done. They are- the mistakes in the logic, ignored “built-in”
functions, missing the cells during copying for calculation purpose, leaving insertion of formulae
in the cells of data. Most common mistake is not saving the changes in the spreadsheet, without
which all the calculations are useless. A new spreadsheet should be used to make any
modification in the calculations to avoid further confusion. Besides this deleting the range names
are necessary and to avoid mistakes the data must be carefully cross checked. Some experts are
also employed by the company to check and double check the calculations to rectify the mistakes
to achieve perfection. Some common errors found in corporate spreadsheets are readability, cell
referencing, hardcoded numbers, apparatus of calculation, hidden sheets and columns and
expanded assumptions. Apart from these, some major mistakes also occur which are, locking of
cells with the formulae, intuitive labeling of charts and labels, cautious commenting and
aesthetics.
Regards,
ACCOUNTING SYSTEMS & PROCESSES
Part D:
To,
The Senior Manager
This is to bring your cognizance to the commonly made mistakes when implementation
of a corporate spreadsheet is done. They are- the mistakes in the logic, ignored “built-in”
functions, missing the cells during copying for calculation purpose, leaving insertion of formulae
in the cells of data. Most common mistake is not saving the changes in the spreadsheet, without
which all the calculations are useless. A new spreadsheet should be used to make any
modification in the calculations to avoid further confusion. Besides this deleting the range names
are necessary and to avoid mistakes the data must be carefully cross checked. Some experts are
also employed by the company to check and double check the calculations to rectify the mistakes
to achieve perfection. Some common errors found in corporate spreadsheets are readability, cell
referencing, hardcoded numbers, apparatus of calculation, hidden sheets and columns and
expanded assumptions. Apart from these, some major mistakes also occur which are, locking of
cells with the formulae, intuitive labeling of charts and labels, cautious commenting and
aesthetics.
Regards,
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16
ACCOUNTING SYSTEMS & PROCESSES
Answer to question 7
Normal View
Inventory Ledger (Average 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
01-Oct 60 $57 $3,420
03-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 (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
01-Oct 60 $57 $3,420
03-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
ACCOUNTING SYSTEMS & PROCESSES
Answer to question 7
Normal View
Inventory Ledger (Average 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
01-Oct 60 $57 $3,420
03-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 (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
01-Oct 60 $57 $3,420
03-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
17
ACCOUNTING SYSTEMS & PROCESSES
Inventory Ledger (LIFO 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
01-Oct 60 $57 $3,420
03-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
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
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
ACCOUNTING SYSTEMS & PROCESSES
Inventory Ledger (LIFO 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
01-Oct 60 $57 $3,420
03-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
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
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
18
ACCOUNTING SYSTEMS & PROCESSES
Formula View
ACCOUNTING SYSTEMS & PROCESSES
Formula View
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ACCOUNTING SYSTEMS & PROCESSES
Revised Data Calculation
Normal View
Inventory Ledger (Average 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
01-Oct 60 $110 $6,600
03-Oct 10.00 $100 $1,000 60 $110 $6,600
10 $68 $680
70 $104 $7,280
12-Oct 30 $85 $2,550 70 $104 $7,280
30 $85 $2,550
100 $98 $9,830
18-Oct 70 $80 $5,600 100 $98 $9,830
70 $80 $5,600
170 $91 $15,430
31-Oct 55 $91 $4,992 115 $91 $10,438
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
01-Oct 60 $110 $6,600
03-Oct 10 $100 $1,000 60 $110 $6,600
10 $100 $1,000
12-Oct 30 $85 $2,550 60 $110 $6,600
10 $100 $1,000
30 $85 $2,550
18-Oct 70 $80 $5,600 60 $110 $6,600
10 $100 $1,000
30 $85 $2,550
70 $80 $5,600
31-Oct 55 $110 $6,050 5 $110 $550
10 $100 $1,000
30 $85 $2,550
70 $80 $5,600
31-Oct 55 $6,050 115 $9,700
ACCOUNTING SYSTEMS & PROCESSES
Revised Data Calculation
Normal View
Inventory Ledger (Average 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
01-Oct 60 $110 $6,600
03-Oct 10.00 $100 $1,000 60 $110 $6,600
10 $68 $680
70 $104 $7,280
12-Oct 30 $85 $2,550 70 $104 $7,280
30 $85 $2,550
100 $98 $9,830
18-Oct 70 $80 $5,600 100 $98 $9,830
70 $80 $5,600
170 $91 $15,430
31-Oct 55 $91 $4,992 115 $91 $10,438
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
01-Oct 60 $110 $6,600
03-Oct 10 $100 $1,000 60 $110 $6,600
10 $100 $1,000
12-Oct 30 $85 $2,550 60 $110 $6,600
10 $100 $1,000
30 $85 $2,550
18-Oct 70 $80 $5,600 60 $110 $6,600
10 $100 $1,000
30 $85 $2,550
70 $80 $5,600
31-Oct 55 $110 $6,050 5 $110 $550
10 $100 $1,000
30 $85 $2,550
70 $80 $5,600
31-Oct 55 $6,050 115 $9,700
20
ACCOUNTING SYSTEMS & PROCESSES
Inventory Ledger (LIFO 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
01-Oct 60 $110 $6,600
03-Oct 10 $100 $1,000 60 $110 $6,600
10 $100 $1,000
12-Oct 30 $85 $2,550 60 $110 $6,600
10 $100 $1,000
30 $85 $2,550
18-Oct 70 $80 $5,600 60 $110 $6,600
10 $100 $1,000
30 $85 $2,550
70 $80 $5,600
31-Oct 55 $80 $4,400 60 $110 $6,600
10 $100 $1,000
30 $85 $2,550
15 $80 $1,200
31-Oct 55 $4,400 115 $11,350
Calculation of Gross Profit
Particulars Average Cost FIFO LIFO
Sales Revenue $25,000 $25,000 $25,000
Less: Cost of Goods Sold $4,992 $6,050 $4,400
GROSS PROFIT $20,008 $18,950 $20,600
Calculation of Gross Profit
Particulars Average Cost FIFO LIFO
Beginning Inventory $6,600 $6,600 $6,600
Net Purchases $9,150 $9,150 $9,150
Cost of Goods Available $15,750 $15,750 $15,750
Ending Inventory $10,438 $9,700 $11,350
Cost of Goods Sold $5,312 $6,050 $4,400
ACCOUNTING SYSTEMS & PROCESSES
Inventory Ledger (LIFO 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
01-Oct 60 $110 $6,600
03-Oct 10 $100 $1,000 60 $110 $6,600
10 $100 $1,000
12-Oct 30 $85 $2,550 60 $110 $6,600
10 $100 $1,000
30 $85 $2,550
18-Oct 70 $80 $5,600 60 $110 $6,600
10 $100 $1,000
30 $85 $2,550
70 $80 $5,600
31-Oct 55 $80 $4,400 60 $110 $6,600
10 $100 $1,000
30 $85 $2,550
15 $80 $1,200
31-Oct 55 $4,400 115 $11,350
Calculation of Gross Profit
Particulars Average Cost FIFO LIFO
Sales Revenue $25,000 $25,000 $25,000
Less: Cost of Goods Sold $4,992 $6,050 $4,400
GROSS PROFIT $20,008 $18,950 $20,600
Calculation of Gross Profit
Particulars Average Cost FIFO LIFO
Beginning Inventory $6,600 $6,600 $6,600
Net Purchases $9,150 $9,150 $9,150
Cost of Goods Available $15,750 $15,750 $15,750
Ending Inventory $10,438 $9,700 $11,350
Cost of Goods Sold $5,312 $6,050 $4,400
21
ACCOUNTING SYSTEMS & PROCESSES
Formula View
ACCOUNTING SYSTEMS & PROCESSES
Formula View
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22
ACCOUNTING SYSTEMS & PROCESSES
Answer to question 8
Normal View
Bank Reconciliation Statement
As on 30th April
Dated 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
Formula View
Changes in data (Revised calculation)
ACCOUNTING SYSTEMS & PROCESSES
Answer to question 8
Normal View
Bank Reconciliation Statement
As on 30th April
Dated 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
Formula View
Changes in data (Revised calculation)
23
ACCOUNTING SYSTEMS & PROCESSES
Normal View
Formula View
ACCOUNTING SYSTEMS & PROCESSES
Normal View
Formula View
24
ACCOUNTING SYSTEMS & PROCESSES
Answer to question 9
Journal Entries Accounts Receivable Entries
Particulars Debit Credit
Party A/c $ 2,000.00
Sales A/c $ 2,000.00
Bank A/c $ 4,300.00
Creditor’s A/c $ 4,300.00
Bad debt A/c $ 3,400.00
Debtor’s A/c $ 3,400.00
Allowance for doubtful A/c $ 6,500.00
accounts receivable A/c $ 6,500.00
Bank A/c $ 7,600.00
Creditor’s A/c $ 7,600.00
ACCOUNTING SYSTEMS & PROCESSES
Answer to question 9
Journal Entries Accounts Receivable Entries
Particulars Debit Credit
Party A/c $ 2,000.00
Sales A/c $ 2,000.00
Bank A/c $ 4,300.00
Creditor’s A/c $ 4,300.00
Bad debt A/c $ 3,400.00
Debtor’s A/c $ 3,400.00
Allowance for doubtful A/c $ 6,500.00
accounts receivable A/c $ 6,500.00
Bank A/c $ 7,600.00
Creditor’s A/c $ 7,600.00
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25
ACCOUNTING SYSTEMS & PROCESSES
Answer to question 10
Estimation of Bad debts
1. Direct write-off method
In the Books of…
Journal Entries
Dr. Cr.
Dated Particulars Amount Amount
10/5/2017 Bad Debts Expenses A/c. Dr. $34,000
To, Accounts Receivable A/c. $34,000
30/6/2017 Profit & Loss A/c. Dr. $34,000
To, Bad Debts Expenses A/c. $34,000
5/7/2017 Cash A/c. Dr. $34,000
To, Bad Debt Recoveree A/c. $34,000
2. Allowance method
In the Books of…
Journal Entries
Dr. Cr.
Date Particulars Amount Amount
10/5/2017 Bad Debts Expenses A/c. Dr. $34,000
To,
Provision for Doubtful Debts
A/c. $34,000
10/5/2017
Provision for Doubtful Debts
A/c. Dr. $34,000
To, Accounts Receivable A/c. $34,000
30/6/2017 Profit & Loss A/c. Dr. $34,000
ACCOUNTING SYSTEMS & PROCESSES
Answer to question 10
Estimation of Bad debts
1. Direct write-off method
In the Books of…
Journal Entries
Dr. Cr.
Dated Particulars Amount Amount
10/5/2017 Bad Debts Expenses A/c. Dr. $34,000
To, Accounts Receivable A/c. $34,000
30/6/2017 Profit & Loss A/c. Dr. $34,000
To, Bad Debts Expenses A/c. $34,000
5/7/2017 Cash A/c. Dr. $34,000
To, Bad Debt Recoveree A/c. $34,000
2. Allowance method
In the Books of…
Journal Entries
Dr. Cr.
Date Particulars Amount Amount
10/5/2017 Bad Debts Expenses A/c. Dr. $34,000
To,
Provision for Doubtful Debts
A/c. $34,000
10/5/2017
Provision for Doubtful Debts
A/c. Dr. $34,000
To, Accounts Receivable A/c. $34,000
30/6/2017 Profit & Loss A/c. Dr. $34,000
26
ACCOUNTING SYSTEMS & PROCESSES
To, Bad Debts Expenses A/c. $34,000
5/7/2017 Accounts Receivable A/c. Dr. $34,000
To,
Provision for Doubtful Debts
A/c. $34,000
5/7/2017 Cash A/c. Dr. $34,000
To, Accounts Receivable A/c. $34,000
.
ACCOUNTING SYSTEMS & PROCESSES
To, Bad Debts Expenses A/c. $34,000
5/7/2017 Accounts Receivable A/c. Dr. $34,000
To,
Provision for Doubtful Debts
A/c. $34,000
5/7/2017 Cash A/c. Dr. $34,000
To, Accounts Receivable A/c. $34,000
.
27
ACCOUNTING SYSTEMS & PROCESSES
Answer to question 11
Evaluation of firm’s financial position
Detailed information concerning the present financial status of the business is essential by
the investors as due diligence. Some of the financial statements are limited to a company such as
cash flow statement, income statement and balance sheet (Deegan, 2012). The records of income
and expenditure which the company has undergone are listed in the income statement. Financial
status is delivered by the balance sheet and cash influxes and outflows are written in the
statement of cash flow of a specific company which is under consideration.
ACCOUNTING SYSTEMS & PROCESSES
Answer to question 11
Evaluation of firm’s financial position
Detailed information concerning the present financial status of the business is essential by
the investors as due diligence. Some of the financial statements are limited to a company such as
cash flow statement, income statement and balance sheet (Deegan, 2012). The records of income
and expenditure which the company has undergone are listed in the income statement. Financial
status is delivered by the balance sheet and cash influxes and outflows are written in the
statement of cash flow of a specific company which is under consideration.
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28
ACCOUNTING SYSTEMS & PROCESSES
Answer to Question 12
Dishonour of a Note Receivable
Particulars Dr. Cr.
Party A/c $ 5,300.00
Sales A/c $ 5,300.00
Notes Receivable A/c $ 4,500.00
Accounts receivable A/c $ 4,500.00
Receivable A/c $ 4,300.00
Bank A/c $ 4,300.00
Bank A/c $ 5,600.00
Receivable A/c $ 5,600.00
ACCOUNTING SYSTEMS & PROCESSES
Answer to Question 12
Dishonour of a Note Receivable
Particulars Dr. Cr.
Party A/c $ 5,300.00
Sales A/c $ 5,300.00
Notes Receivable A/c $ 4,500.00
Accounts receivable A/c $ 4,500.00
Receivable A/c $ 4,300.00
Bank A/c $ 4,300.00
Bank A/c $ 5,600.00
Receivable A/c $ 5,600.00
29
ACCOUNTING SYSTEMS & PROCESSES
Answer to Question 13
Company Wesfarmers Limited
The above mentioned question is concerned with the specifics of Australian Retail
Company which runs in the name of Wesfarmers Limited (Wesfarmers.com.au, 2017). It is a
listed company in Australian Stock Exchange which has its operations in different dimensions of
retail such as safety, chemicals, industries, and energy and office developments.
The annual report consists of all the details of Wesfarmers Limited which portrays the
profits made by the parent member of the company. It deals in foreign currency which is $15
million and shows cash flow which is derived from the hedge reserve (Wesfarmers.com.au,
2017). This proves the fact that the company is suffering a loss worth $78 million
(Wesfarmers.com.au, 2017).
In the financial year 2016, the company has paid dividend amounting to $2600 million
(Wesfarmers.com.au, 2017).
Return on Equity
Net Income $407
Shareholder’s Equity $22,949
Return on Equity 0.018
Computation of annual report shows that Wesfarmers Limited is making only $0.018 on
the equity which is catastrophic for the company in the long run (Wesfarmers.com.au, 2017).
Wesfarmers Limited is earning profit of 36.2% per share using the weighted average
numbers of its ordinary shares (Wesfarmers.com.au, 2017).
Wesfarmers Limited will never disclose the fact that there is any discrepancy in the
financial statement incorporating wrong figures for the materials which comes under the ambit of
the risk mitigation management of the company. They have not allotted the job of making the
financial statement to any person which is a rule under the compliance with the conceptual
framework of AASB (Wesfarmers.com.au, 2017).
When it comes to the matter of corporate governance, compliance with the third edition
of ASX Corporate governance is maintained by the company.
ACCOUNTING SYSTEMS & PROCESSES
Answer to Question 13
Company Wesfarmers Limited
The above mentioned question is concerned with the specifics of Australian Retail
Company which runs in the name of Wesfarmers Limited (Wesfarmers.com.au, 2017). It is a
listed company in Australian Stock Exchange which has its operations in different dimensions of
retail such as safety, chemicals, industries, and energy and office developments.
The annual report consists of all the details of Wesfarmers Limited which portrays the
profits made by the parent member of the company. It deals in foreign currency which is $15
million and shows cash flow which is derived from the hedge reserve (Wesfarmers.com.au,
2017). This proves the fact that the company is suffering a loss worth $78 million
(Wesfarmers.com.au, 2017).
In the financial year 2016, the company has paid dividend amounting to $2600 million
(Wesfarmers.com.au, 2017).
Return on Equity
Net Income $407
Shareholder’s Equity $22,949
Return on Equity 0.018
Computation of annual report shows that Wesfarmers Limited is making only $0.018 on
the equity which is catastrophic for the company in the long run (Wesfarmers.com.au, 2017).
Wesfarmers Limited is earning profit of 36.2% per share using the weighted average
numbers of its ordinary shares (Wesfarmers.com.au, 2017).
Wesfarmers Limited will never disclose the fact that there is any discrepancy in the
financial statement incorporating wrong figures for the materials which comes under the ambit of
the risk mitigation management of the company. They have not allotted the job of making the
financial statement to any person which is a rule under the compliance with the conceptual
framework of AASB (Wesfarmers.com.au, 2017).
When it comes to the matter of corporate governance, compliance with the third edition
of ASX Corporate governance is maintained by the company.
30
ACCOUNTING SYSTEMS & PROCESSES
Working capital ratio
Net profit after tax
Net profit after tax
Particulars
Year Amount ($m)
2016 $ 2,353.00
2015 $ 2,240.00
2014 $ 2,689.00
2013 $ 2,261.00
2012 $ 2,126.00
Vikram is recommended to invest his money which amounts to $50,000 in Wesfarmers
Limited because the organization is currently stable and the net profits have enhanced since the
last 5 years. It has been observed that the Wesfarmers Limited has the potential to make profits
in the coming financial year.
ACCOUNTING SYSTEMS & PROCESSES
Working capital ratio
Net profit after tax
Net profit after tax
Particulars
Year Amount ($m)
2016 $ 2,353.00
2015 $ 2,240.00
2014 $ 2,689.00
2013 $ 2,261.00
2012 $ 2,126.00
Vikram is recommended to invest his money which amounts to $50,000 in Wesfarmers
Limited because the organization is currently stable and the net profits have enhanced since the
last 5 years. It has been observed that the Wesfarmers Limited has the potential to make profits
in the coming financial year.
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31
ACCOUNTING SYSTEMS & PROCESSES
Reference
AASB, C.A.S., (2016). Consolidated Financial Statements
Deegan, C. (2012). Australian financial accounting. McGraw-Hill Education Australia.
Drury, C. M. (2013). Management and cost accounting. Springer.
Hall, J. A. (2012). Accounting information systems. Cengage Learning.
Nobles, T. L., Mattison, B. L., & Matsumura, E. M. (2013). Horngren's Financial &
Managerial Accounting: Pearson New International Edition. Pearson Higher Ed.
Odar, M., Kavčič, S., & Jerman, M. (2015). The role of a management accounting system in the
decision-making process: evidence from a post-transition economy. Engineering
Economics, 26(1), 84-92.
Porter, G. A., & Norton, C. L. (2012). Financial accounting: the impact on decision makers.
Cengage Learning.
Pratt, J. (2013). Financial accounting in an economic context. Wiley Global Education.
Schipper, K. (2013). Principles-based accounting standards. Accounting horizons, 17(1), 61-
72.
Weil, R. L., Schipper, K., & Francis, J. (2013). Financial accounting: an introduction to
concepts, methods and uses. Cengage Learning.
Wesfarmers.com.au. (2017). Home. Wesfarmers.com.au. Retrieved 17 September 2017, from
http://wesfarmers.com.au
ACCOUNTING SYSTEMS & PROCESSES
Reference
AASB, C.A.S., (2016). Consolidated Financial Statements
Deegan, C. (2012). Australian financial accounting. McGraw-Hill Education Australia.
Drury, C. M. (2013). Management and cost accounting. Springer.
Hall, J. A. (2012). Accounting information systems. Cengage Learning.
Nobles, T. L., Mattison, B. L., & Matsumura, E. M. (2013). Horngren's Financial &
Managerial Accounting: Pearson New International Edition. Pearson Higher Ed.
Odar, M., Kavčič, S., & Jerman, M. (2015). The role of a management accounting system in the
decision-making process: evidence from a post-transition economy. Engineering
Economics, 26(1), 84-92.
Porter, G. A., & Norton, C. L. (2012). Financial accounting: the impact on decision makers.
Cengage Learning.
Pratt, J. (2013). Financial accounting in an economic context. Wiley Global Education.
Schipper, K. (2013). Principles-based accounting standards. Accounting horizons, 17(1), 61-
72.
Weil, R. L., Schipper, K., & Francis, J. (2013). Financial accounting: an introduction to
concepts, methods and uses. Cengage Learning.
Wesfarmers.com.au. (2017). Home. Wesfarmers.com.au. Retrieved 17 September 2017, from
http://wesfarmers.com.au
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