Financial Analysis of Wesfarmers Ltd.
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AI Summary
This assignment requires a comprehensive analysis of Wesfarmers Limited's financial performance. Students must examine key financial statements such as the income statement and balance sheet to evaluate aspects like profitability (return on equity, earnings per share), liquidity (working capital ratio), and dividend policy. The analysis should also consider the company's diverse business portfolio and sustainability practices. Finally, students are tasked with providing investment advice to a potential investor based on their findings.
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Running head: ACCOUNTING SYSTEMS AND PROCESSES
Accounting systems and Processes
Name of the Student:
Name of the University:
Author Note:
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
Question 9:.....................................................................................................................................19
Question 10....................................................................................................................................20
Question 11....................................................................................................................................21
Question 12....................................................................................................................................21
Question 13....................................................................................................................................21
References:....................................................................................................................................25
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
Question 9:.....................................................................................................................................19
Question 10....................................................................................................................................20
Question 11....................................................................................................................................21
Question 12....................................................................................................................................21
Question 13....................................................................................................................................21
References:....................................................................................................................................25
3
ACCOUNTING SYSTEMS AND PROCESSES
Question 1
Naming cells in spreadsheets:
Replacing cell references with names helps in making formulas much easier to
maintaining and understand. Using name would help users in easily auditing, updating and
managing the items. Purpose of cell references can be easily understood by using names.
Location that helps in recognition of name without qualification helps is referred to as scope of
location (Fullerton et al., 2014). Defined names in workbook can be managed by using name
manager dialog box.
Gross Profit Computation:-
Particulars Amount
Revenue generated from sales $24500
Less: Goods sold cost $4500
GROSS PROFIT $20000
Question 2
Negative numbers can be displayed in brackets using minus sign or by coloring it such as
highlighting it with red color. Displaying negative numbers in brackets by accountant is simply
ACCOUNTING SYSTEMS AND PROCESSES
Question 1
Naming cells in spreadsheets:
Replacing cell references with names helps in making formulas much easier to
maintaining and understand. Using name would help users in easily auditing, updating and
managing the items. Purpose of cell references can be easily understood by using names.
Location that helps in recognition of name without qualification helps is referred to as scope of
location (Fullerton et al., 2014). Defined names in workbook can be managed by using name
manager dialog box.
Gross Profit Computation:-
Particulars Amount
Revenue generated from sales $24500
Less: Goods sold cost $4500
GROSS PROFIT $20000
Question 2
Negative numbers can be displayed in brackets using minus sign or by coloring it such as
highlighting it with red color. Displaying negative numbers in brackets by accountant is simply
4
ACCOUNTING SYSTEMS AND PROCESSES
indicating of credit entries and sometimes variables that are not favorable to organization are also
used in brackets.
ACCOUNTING SYSTEMS AND PROCESSES
indicating of credit entries and sometimes variables that are not favorable to organization are also
used in brackets.
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5
ACCOUNTING SYSTEMS AND PROCESSES
Question 3
Designing the spreadsheet with complete separate area for report and data entry area by
accountant would help in minimizing the errors ascertained in financial reporting. This would
facilitating proper management of data entry. Separation of report and data entry area would help
in eliminating discrepancies and mistakes. Tremendous risks would be attributable to business if
improper and incorrect information is generated from spreadsheets (Atar&Birman, 2017).
Creation of spreadsheet would make entry system systematic and easier recording of data.
Question 4
One of the most popular function in Excel is use of IF function that facilitated logical
comparison between what is expected by users and value.
PERIOD Particulars Amount Remarks
September'17
Sales Revenue, less,
Total Expenses 45300
=IF(C7>0,"NET
PROFIT","NET LOSS")
ACCOUNTING SYSTEMS AND PROCESSES
Question 3
Designing the spreadsheet with complete separate area for report and data entry area by
accountant would help in minimizing the errors ascertained in financial reporting. This would
facilitating proper management of data entry. Separation of report and data entry area would help
in eliminating discrepancies and mistakes. Tremendous risks would be attributable to business if
improper and incorrect information is generated from spreadsheets (Atar&Birman, 2017).
Creation of spreadsheet would make entry system systematic and easier recording of data.
Question 4
One of the most popular function in Excel is use of IF function that facilitated logical
comparison between what is expected by users and value.
PERIOD Particulars Amount Remarks
September'17
Sales Revenue, less,
Total Expenses 45300
=IF(C7>0,"NET
PROFIT","NET LOSS")
6
ACCOUNTING SYSTEMS AND PROCESSES
September'17
Sales Revenue, less,
Total Expenses -21000
=IF(C8>0,"NET
PROFIT","NET LOSS")
Statement of IF function is regarded as conditional functioning that helps in displaying
information and performing function. User can command whether the conditions are met or not
using the IF function. A statement can have two results and first results occurs when comparison
is true and second results occurs when comparison is false. Text and values can be evaluated
suing IF functions along with error evaluation. Users are able to perform multiple comparisons if
multiple IF functions are used together.
Question 5
Periodic inventory system is a system of inventory where updating is done on period
basis. In the event of conducting physical count of inventories, the ending balance of inventories
is updated in general ledger using such inventory system. All the purchase made between the
physical inventory counts under the periodic inventory system are recorded in purchase account.
Purchase account balance are adjusted to ending inventory cost after shifting to inventory cost.
Under the periodic inventory cost, cost of goods sold is calculated by adding purchase and
beginning inventory balance. The formula for calculating the cost sold goods sold under the
period inventory system are
Cost of goods sold= Opening inventory balance – closing inventory balance +
Purchase
ACCOUNTING SYSTEMS AND PROCESSES
September'17
Sales Revenue, less,
Total Expenses -21000
=IF(C8>0,"NET
PROFIT","NET LOSS")
Statement of IF function is regarded as conditional functioning that helps in displaying
information and performing function. User can command whether the conditions are met or not
using the IF function. A statement can have two results and first results occurs when comparison
is true and second results occurs when comparison is false. Text and values can be evaluated
suing IF functions along with error evaluation. Users are able to perform multiple comparisons if
multiple IF functions are used together.
Question 5
Periodic inventory system is a system of inventory where updating is done on period
basis. In the event of conducting physical count of inventories, the ending balance of inventories
is updated in general ledger using such inventory system. All the purchase made between the
physical inventory counts under the periodic inventory system are recorded in purchase account.
Purchase account balance are adjusted to ending inventory cost after shifting to inventory cost.
Under the periodic inventory cost, cost of goods sold is calculated by adding purchase and
beginning inventory balance. The formula for calculating the cost sold goods sold under the
period inventory system are
Cost of goods sold= Opening inventory balance – closing inventory balance +
Purchase
7
ACCOUNTING SYSTEMS AND PROCESSES
For instance, ABC Corporation has an opening balance of $ 98000 and physical
inventory count at ending period is recorded at $ 70000 and has made a purchase of $ 120000.
Opening balance= $ 98000
Purchase= $ 120000
Closing balance= $ 70000
COGS= ($ 98000 + $ 120000 - $ 70000) = $ 148000
Question 6:
Normal View:
ACCOUNTING SYSTEMS AND PROCESSES
For instance, ABC Corporation has an opening balance of $ 98000 and physical
inventory count at ending period is recorded at $ 70000 and has made a purchase of $ 120000.
Opening balance= $ 98000
Purchase= $ 120000
Closing balance= $ 70000
COGS= ($ 98000 + $ 120000 - $ 70000) = $ 148000
Question 6:
Normal View:
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ACCOUNTING SYSTEMS AND PROCESSES
ACCOUNTING SYSTEMS AND PROCESSES
9
ACCOUNTING SYSTEMS AND PROCESSES
ACCOUNTING SYSTEMS AND PROCESSES
10
ACCOUNTING SYSTEMS AND PROCESSES
Formula View:
ACCOUNTING SYSTEMS AND PROCESSES
Formula View:
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ACCOUNTING SYSTEMS AND PROCESSES
ACCOUNTING SYSTEMS AND PROCESSES
12
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
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
13
ACCOUNTING SYSTEMS AND PROCESSES
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:-
Formula View:
ACCOUNTING SYSTEMS AND PROCESSES
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:-
Formula View:
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ACCOUNTING SYSTEMS AND PROCESSES
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
ACCOUNTING SYSTEMS AND PROCESSES
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
15
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
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
16
ACCOUNTING SYSTEMS AND PROCESSES
Revised Data:
Particulars
Average
Cost FIFO LIFO
Beginning Inventory $4,620 $4,620 $4,620
Net Purchases $7,610 $7,610 $7,610
Cost of Goods Available $12,230 $12,230 $12,230
Ending Inventory $8,226 $7,995 $8,490
Cost of Goods Sold $4,004 $4,235 $3,740
Calculation of Cost of Goods Sold:-
Particulars
Average
Cost FIFO LIFO
Sales Revenue $25,000 $25,000 $25,000
Less: Cost of Goods Sold $3,934 $4,235 $3,740
GROSS PROFIT $21,066 $20,765 $21,260
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 $77 $4,620
3-Oct 10.00 $75 $750 60 $77 $4,620
10 $68 $680
70 $76 $5,300
12-Oct 30 $70 $2,100 70 $76 $5,300
30 $70 $2,100
100 $74 $7,400
18-Oct 70 $68 $4,760 100 $74 $7,400
70 $68 $4,760
170 $72 $12,160
31-Oct 55 $72 $3,934 115 $72 $8,226
Inventory Ledger (Average Method):
Purchase Cost of Goods Sold Balance Inventory
ACCOUNTING SYSTEMS AND PROCESSES
Revised Data:
Particulars
Average
Cost FIFO LIFO
Beginning Inventory $4,620 $4,620 $4,620
Net Purchases $7,610 $7,610 $7,610
Cost of Goods Available $12,230 $12,230 $12,230
Ending Inventory $8,226 $7,995 $8,490
Cost of Goods Sold $4,004 $4,235 $3,740
Calculation of Cost of Goods Sold:-
Particulars
Average
Cost FIFO LIFO
Sales Revenue $25,000 $25,000 $25,000
Less: Cost of Goods Sold $3,934 $4,235 $3,740
GROSS PROFIT $21,066 $20,765 $21,260
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 $77 $4,620
3-Oct 10.00 $75 $750 60 $77 $4,620
10 $68 $680
70 $76 $5,300
12-Oct 30 $70 $2,100 70 $76 $5,300
30 $70 $2,100
100 $74 $7,400
18-Oct 70 $68 $4,760 100 $74 $7,400
70 $68 $4,760
170 $72 $12,160
31-Oct 55 $72 $3,934 115 $72 $8,226
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 $77 $4,620
3-Oct 10 $75 $750 60 $77 $4,620
10 $75 $750
12-Oct 30 $70 $2,100 60 $77 $4,620
10 $75 $750
30 $70 $2,100
18-Oct 70 $68 $4,760 60 $77 $4,620
10 $75 $750
30 $70 $2,100
70 $68 $4,760
31-Oct 55 $77 $4,235 5 $77 $385
10 $75 $750
30 $70 $2,100
70 $68 $4,760
31-Oct 55 $4,235 115 $7,995
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 $77 $4,620
3-Oct 10 $75 $750 60 $77 $4,620
10 $75 $750
12-Oct 30 $70 $2,100 60 $77 $4,620
10 $75 $750
30 $70 $2,100
18-Oct 70 $68 $4,760 60 $77 $4,620
10 $75 $750
30 $70 $2,100
70 $68 $4,760
31-Oct 55 $68 $3,740 60 $77 $4,620
10 $75 $750
30 $70 $2,100
15 $68 $1,020
31-Oct 55 $3,740 115 $8,490
Purchase Cost of Goods Sold Balance Inventory
Inventory Ledger (LIFO Method):
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 $77 $4,620
3-Oct 10 $75 $750 60 $77 $4,620
10 $75 $750
12-Oct 30 $70 $2,100 60 $77 $4,620
10 $75 $750
30 $70 $2,100
18-Oct 70 $68 $4,760 60 $77 $4,620
10 $75 $750
30 $70 $2,100
70 $68 $4,760
31-Oct 55 $77 $4,235 5 $77 $385
10 $75 $750
30 $70 $2,100
70 $68 $4,760
31-Oct 55 $4,235 115 $7,995
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 $77 $4,620
3-Oct 10 $75 $750 60 $77 $4,620
10 $75 $750
12-Oct 30 $70 $2,100 60 $77 $4,620
10 $75 $750
30 $70 $2,100
18-Oct 70 $68 $4,760 60 $77 $4,620
10 $75 $750
30 $70 $2,100
70 $68 $4,760
31-Oct 55 $68 $3,740 60 $77 $4,620
10 $75 $750
30 $70 $2,100
15 $68 $1,020
31-Oct 55 $3,740 115 $8,490
Purchase Cost of Goods Sold Balance Inventory
Inventory Ledger (LIFO Method):
18
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
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
19
ACCOUNTING SYSTEMS AND PROCESSES
Revised Data:
Date Particulars Amount
30/4 Bank Balance as per Pass Book $19,670
Add:
Deposit in Transit $8,551
EFT Insurance Payment $2,490
Book Error Cheque 1419 $875
NSF Cheque from Customer $2,870
Bank Service Charge $35 $14,821
$34,491
Less:
Outstanding Cheques 7995
EFT Rent Receipt 950
Note Receivable $6,515
$15,460
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. $18,700
To, Sales A/c. $18,700
30/4/2017 Cash A/c. Dr. $9,350
To, Accounts Receivable A/c. $9,350
5/30/2017 Bad Debts Expenses A/c. Dr. $9,350
To, Accounts Receivable A/c. $9,350
15/6/2017 Cash A/c. Dr. $9,350
To, Bad Debt Recoveree A/c. $9,350
Particulars
In the Books of…
Journal Entries
ACCOUNTING SYSTEMS AND PROCESSES
Revised Data:
Date Particulars Amount
30/4 Bank Balance as per Pass Book $19,670
Add:
Deposit in Transit $8,551
EFT Insurance Payment $2,490
Book Error Cheque 1419 $875
NSF Cheque from Customer $2,870
Bank Service Charge $35 $14,821
$34,491
Less:
Outstanding Cheques 7995
EFT Rent Receipt 950
Note Receivable $6,515
$15,460
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. $18,700
To, Sales A/c. $18,700
30/4/2017 Cash A/c. Dr. $9,350
To, Accounts Receivable A/c. $9,350
5/30/2017 Bad Debts Expenses A/c. Dr. $9,350
To, Accounts Receivable A/c. $9,350
15/6/2017 Cash A/c. Dr. $9,350
To, Bad Debt Recoveree A/c. $9,350
Particulars
In the Books of…
Journal Entries
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20
ACCOUNTING SYSTEMS AND PROCESSES
Question 10
Direct Write-Off Method:
Dr. Cr.
Date Amount Amount
10/5/2017 Bad Debts Expenses A/c. Dr. $9,700
To, Accounts Receivable A/c. $9,700
30/6/2017 Profit & Loss A/c. Dr. $9,700
To, Bad Debts Expenses A/c. $9,700
5/7/2017 Cash A/c. Dr. $9,700
To, Bad Debt Recoveree A/c. $9,700
In the Books of…
Journal Entries
Particulars
Allowance Method:
Dr. Cr.
Date Amount Amount
10/5/2017 Bad Debts Expenses A/c. Dr. $9,700
To,
Provision for Doubtful Debts
A/c. $9,700
10/5/2017
Provision for Doubtful Debts
A/c. Dr. $9,700
To, Accounts Receivable A/c. $9,700
30/6/2017 Profit & Loss A/c. Dr. $9,700
To, Bad Debts Expenses A/c. $9,700
5/7/2017 Accounts Receivable A/c. Dr. $9,700
To,
Provision for Doubtful Debts
A/c. $9,700
5/7/2017 Cash A/c. Dr. $9,700
To, Accounts Receivable A/c. $9,700
In the Books of…
Journal Entries
Particulars
ACCOUNTING SYSTEMS AND PROCESSES
Question 10
Direct Write-Off Method:
Dr. Cr.
Date Amount Amount
10/5/2017 Bad Debts Expenses A/c. Dr. $9,700
To, Accounts Receivable A/c. $9,700
30/6/2017 Profit & Loss A/c. Dr. $9,700
To, Bad Debts Expenses A/c. $9,700
5/7/2017 Cash A/c. Dr. $9,700
To, Bad Debt Recoveree A/c. $9,700
In the Books of…
Journal Entries
Particulars
Allowance Method:
Dr. Cr.
Date Amount Amount
10/5/2017 Bad Debts Expenses A/c. Dr. $9,700
To,
Provision for Doubtful Debts
A/c. $9,700
10/5/2017
Provision for Doubtful Debts
A/c. Dr. $9,700
To, Accounts Receivable A/c. $9,700
30/6/2017 Profit & Loss A/c. Dr. $9,700
To, Bad Debts Expenses A/c. $9,700
5/7/2017 Accounts Receivable A/c. Dr. $9,700
To,
Provision for Doubtful Debts
A/c. $9,700
5/7/2017 Cash A/c. Dr. $9,700
To, Accounts Receivable A/c. $9,700
In the Books of…
Journal Entries
Particulars
21
ACCOUNTING SYSTEMS AND PROCESSES
Question 11
The financial position of an organization can be evaluated using receivables as this can
evaluate their ability to meet cash obligations. Using financial ratio tool would establish
relationship between annual sales and accounts receivables. Balances of accounts receivable
helps in evaluating the liquidity position of organization and their ability to pay of their
obligations. Ability of organization to generate enough cash for paying off its short-term
obligations is depicted by looking at receivable accounts. Accounts receivable is a part of total
assets and therefore, it mainly reflects the liquidity and efficiency position of organization.
Question 12
Dr. Cr.
Date Amount Amount
5/7/2017 Accounts Receivable A/c. Dr. $7,850
To, Sales A/c. $7,850
28/7/2017 Notes Receivables A/c. Dr. $7,850
To, Accounts Receivable A/c. $7,850
27/9/2017 Accounts Receivable A/c. Dr. $7,850
To, Notes Receivables A/c. $7,850
5/10/2017 Cash A/c. Dr. $7,850
To, Accounts Receivable A/c. $7,850
Journal Entries
Particulars
In the Books of…
Question 13
Background of Wesfarmers:
ACCOUNTING SYSTEMS AND PROCESSES
Question 11
The financial position of an organization can be evaluated using receivables as this can
evaluate their ability to meet cash obligations. Using financial ratio tool would establish
relationship between annual sales and accounts receivables. Balances of accounts receivable
helps in evaluating the liquidity position of organization and their ability to pay of their
obligations. Ability of organization to generate enough cash for paying off its short-term
obligations is depicted by looking at receivable accounts. Accounts receivable is a part of total
assets and therefore, it mainly reflects the liquidity and efficiency position of organization.
Question 12
Dr. Cr.
Date Amount Amount
5/7/2017 Accounts Receivable A/c. Dr. $7,850
To, Sales A/c. $7,850
28/7/2017 Notes Receivables A/c. Dr. $7,850
To, Accounts Receivable A/c. $7,850
27/9/2017 Accounts Receivable A/c. Dr. $7,850
To, Notes Receivables A/c. $7,850
5/10/2017 Cash A/c. Dr. $7,850
To, Accounts Receivable A/c. $7,850
Journal Entries
Particulars
In the Books of…
Question 13
Background of Wesfarmers:
22
ACCOUNTING SYSTEMS AND PROCESSES
Wesfarmers is involved in diversified range of business such as coals, chemicals,
convenience stores, retail, energy, home improvement and office supplies and other industrial
division.
Comment on statement of comprehensive income:
For the financial year 2016, total amount of dividend payable to shareholders of
Wesfarmers was recorded at $ 2600 million. Return on equity is obtained by dividing net income
by total shareholder’s equity. ROE for year financial year 2016 is calculated at 0.018. Earnings
per share of Wesfarmers for financial year 2016 stood at 36.2%. Earnings per share of group is
obtained by dividing profit amounts by ordinary number of shares and there has been increase in
earnings per share in year 2016. By looking at income statement, it can be seen that earning
before tax and interest has reduced considerably from $ 3759 million in year 2015 to $ 1346 in
year 2016 respectively (Wesfarmers.com.au, 2017). When looking at tee figures in the annual
report concerning the risk and mitigation, it cannot be said that figures have not been materially
misstated.
Sustainability maintenance of organization has helped in attaining competitive advantage
of group over its competitors. Recommendations issues regarding to corporate governance are
complies by Wesfarmers as far as corporate governance is concerned.
Working capital ratio:
Current assets = $ 9684
Current liabilities = $ 10424
ACCOUNTING SYSTEMS AND PROCESSES
Wesfarmers is involved in diversified range of business such as coals, chemicals,
convenience stores, retail, energy, home improvement and office supplies and other industrial
division.
Comment on statement of comprehensive income:
For the financial year 2016, total amount of dividend payable to shareholders of
Wesfarmers was recorded at $ 2600 million. Return on equity is obtained by dividing net income
by total shareholder’s equity. ROE for year financial year 2016 is calculated at 0.018. Earnings
per share of Wesfarmers for financial year 2016 stood at 36.2%. Earnings per share of group is
obtained by dividing profit amounts by ordinary number of shares and there has been increase in
earnings per share in year 2016. By looking at income statement, it can be seen that earning
before tax and interest has reduced considerably from $ 3759 million in year 2015 to $ 1346 in
year 2016 respectively (Wesfarmers.com.au, 2017). When looking at tee figures in the annual
report concerning the risk and mitigation, it cannot be said that figures have not been materially
misstated.
Sustainability maintenance of organization has helped in attaining competitive advantage
of group over its competitors. Recommendations issues regarding to corporate governance are
complies by Wesfarmers as far as corporate governance is concerned.
Working capital ratio:
Current assets = $ 9684
Current liabilities = $ 10424
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23
ACCOUNTING SYSTEMS AND PROCESSES
Working capital ratio is obtained by dividing current assets by current liabilities and ratio for
year 2016 is recorded at 0.93.
Net profit tax:
1 2 3 4 5 6
0
500
1000
1500
2000
2500
3000
Net profit after tax
Series1 Series2 Series3
Advising Vikram for investment decisions:
From the above analysis, it can be viewed that organization has experienced an increase in value
of profit and organization is in stable position. Over the past few years, organization has been
ACCOUNTING SYSTEMS AND PROCESSES
Working capital ratio is obtained by dividing current assets by current liabilities and ratio for
year 2016 is recorded at 0.93.
Net profit tax:
1 2 3 4 5 6
0
500
1000
1500
2000
2500
3000
Net profit after tax
Series1 Series2 Series3
Advising Vikram for investment decisions:
From the above analysis, it can be viewed that organization has experienced an increase in value
of profit and organization is in stable position. Over the past few years, organization has been
24
ACCOUNTING SYSTEMS AND PROCESSES
capable of generating sufficient profits and so it is viable for Vikram to invest his $ 50000.
Investment of such amount would help in generating sufficient profits and providing him with
sustainable return.
ACCOUNTING SYSTEMS AND PROCESSES
capable of generating sufficient profits and so it is viable for Vikram to invest his $ 50000.
Investment of such amount would help in generating sufficient profits and providing him with
sustainable return.
25
ACCOUNTING SYSTEMS AND PROCESSES
References:
Atar, N., &Birman, S. (2017). U.S. Patent No. 9,600,536. Washington, DC: U.S. Patent and
Trademark Office.
DRURY, C. M. (2013). Management and cost accounting. Springer.
Fullerton, R. R., Kennedy, F. A., & Widener, S. K. (2014). Lean manufacturing and firm
performance: The incremental contribution of lean management accounting
practices. Journal of Operations Management, 32(7), 414-428.
Wesfarmers.com.au. (2017). [online] Available at: https://www.wesfarmers.com.au/docs/default-
source/reports/2016-annual-report.pdf?sfvrsn=4 [Accessed 16 Sep. 2017].
ACCOUNTING SYSTEMS AND PROCESSES
References:
Atar, N., &Birman, S. (2017). U.S. Patent No. 9,600,536. Washington, DC: U.S. Patent and
Trademark Office.
DRURY, C. M. (2013). Management and cost accounting. Springer.
Fullerton, R. R., Kennedy, F. A., & Widener, S. K. (2014). Lean manufacturing and firm
performance: The incremental contribution of lean management accounting
practices. Journal of Operations Management, 32(7), 414-428.
Wesfarmers.com.au. (2017). [online] Available at: https://www.wesfarmers.com.au/docs/default-
source/reports/2016-annual-report.pdf?sfvrsn=4 [Accessed 16 Sep. 2017].
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