ACCTG 211 Assignment 2 Answer Booklet

This ACCTG 211 Assignment 2 Answer Booklet includes Statement of Cash Flows for Henk Ltd, Jack Ltd, Melanie Ltd and Damian Ltd. It also covers the impact of legal system on accounting and partial statement of cash flows for Damian Ltd.

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ASSIGNMENT 2 ANSWER BOOKLET (14 pages)
This assignment is due online by 6 pm* on Friday 16th March 2018. *Do not submit at exactly
6 pm as it will be recorded as being late, i.e., it will not be accepted for marking.
It is your responsibility to ensure the Assignment 2 Answer Booklet is successfully submitted,
the format is not changed, it is downloadable and readable by the ACCTG 211 markers.
QUESTION 1
Statement of Cash Flows for Henk Ltd for the year ended 31 March 2017
QUESTION 2
Accounts receivable
GST
inclusive
Balance b/d 18860
Cash flows from operating activities $
Profit after tax 142000
Add: Adjustment for net cash from operating activities
Depreciation Expense 76000
Doubtful debts expense 40000
Income tax expense 67000
Interest Income -3500
Gain on sale of equipment -500
Net operating cash before working capital adjustemnts
Add: Decrease in current asset and increase in current laibilities
Decraese in Prepaid expense 4300
Incraese in Accounts payable 10410
Less: Incrase in Current Asset and decrease in current liability
Increse in debtors -60000
Increse in Inventory -11000
Cash generated from operations 264710
Income tax paid -67000
Less: Bad debt expenses -25000
Net cash (used in)/from operating activities 172710
Cash flows from investing activities
Purchase of Plant and Machinery -204000
Sale of Plant & Machinery 500
Interest received 3790
Sale of Investment 84000
Net cash (used in)/from investing activities -115710
QUESTION 1 continued:
Cash flows from financing activities
Dividend Paid -94000
Net cash (used in)/from financing activities -94000
Net increase/(decrease ) in cash and cash equivalents -37000
Cash and cash equivalents at beginning of period 76000
Cash and cash equivalents at end of period 39000
Jack Ltd Statement of Cash Flows (excerpt)
for the period ended 31 March 2017
Cash flows from operating activities:
Sales 16400
Purchases 407
GST expenses 1542
Net cash (used)/from operating activities 14451
GST
exclusive
GST GST
inclusive
GST
exclusive
GST
2915 437.25 3352.25 Sales 16400 2460

3036
Accounts payable
GST
exclusive
GST inclusive
407 2643.85
1892
GST payable/receivable
QUESTION 3
Scenario 1 GST
Scenario 2 GST
Scenario 3 GST
QUESTION 4
Balance c/d 2640 396
GST GST inclusive GST
exclusive
GST
Purchases (B F) 61.05 468.05 Balance b/d 2299 344.85
Balance c/d 283.8 2175.8
Balance b/d 1673
Net GST Payable- 51.15
GST Expense (B F) -1541.85
Balnce c/d -80
Opening balance or Opening balance 267
Accounts payable 1 241 Accounts receivable 700
Cash 495 GST Income - Liability (BF) 297
Closing balance 769 or Closing balance
1264 1264
Opening balance 267 or Opening balance
Accounts payable 470 Accounts receivable 700
Cash 732 GST Income - Liability (BF) 1538
Closing balance 769 or Closing balance
2238 2238
Opening balance 267 or Opening balance
Accounts payable 470 Accounts receivable 700
GST Expense (BF) 1538 Cash 806
Closing balance or Closing balance 769
2275 2275
Statement of Cash Flows for Melanie Ltd for the year ended 31 March 2017
Cash flows from operating activities $
Cash Receipts from Customers 517000
Cash paid to Suppliers -141000
Cash generated from operations 376000
Income Tax Paid -47000
Cash flow before extraordinary items 329000
Extraordinary items 145000
Net cash (used in)/from operating activities 184000
Cash flows from investing activities
Purchase of plant and equipment -258000
Sale of equipment 8000
Net cash (used in)/from investing activities -250000
Cash flows from financing activities
Proceeds from share capital 20000
Proceeds from Long term liability 110000
Interest Paid -42000
Net cash (used in)/from financing activities 88000
Net increase/(decrease) in cash and cash equivalents 22000

QUESTION 4 continued:
QUESTION 5
QUESTION 6
QUESTION 7
Cash and cash equivalents at beginning of period 33000
Cash and cash equivalents at end of period 55000
Melanie Ltd Reconciliation for the year ended 31 March 2017 as required by FRS-44 when using the direct method in the SCF
Profit/(Loss) for the year 145000
Non-cash items:
Depreciation 9000
Deferrals/accruals of past or future operating cash receipts/ payments:
Items classified as investing/financing activities:
Interest Expense 42000
Depreciation -9000
loss 3000
Scenario 1 Scenario 2 Scenario 3
Net cash (used in)/from operating activities 184000
Cash and cash equivalents = 70000 35000 5000
The legal system has majorly affected the accounting. Accounting is the art of collection and analyzing the data of the organization and interpreting the same in the very useful and defined
manner. The legal system majorly in the field of accounting denotes the accounting standard bodies and the standard setting bodies. These bodies define the accounting standards and policies
and describe the way in which the accounting is done and how the same shall be presented and disclosed to the users of the financial statements (Watts & Zimmerman, 2016)
For instance, there was no major part of the check till the date when the major collapses have happened during the 21st century. These include the Lehman Brothers, One Tel Co, HIH
Insurance, etc. All these are the best examples which proves that the accounting field has emerged as the new field which contains new statutes and new governing laws which help the
stakeholders of the company to understand as to why the particular company is following the particular method of accounting and what are the challenges that the company will face in case
the accounting method as envisaged by the accounting standard bodies are applied. These accounting treatments are certified by the chartered accountants duly qualified and certified with
the Institute of chartered accountants and strictly adheres to the guidelines as prescribed by the relevant accounting policies and the accounting standards (Puro, 2016). In this manner, the
changes in legal system due to various factors have influenced the development and regulation of accounting in New Zealand and Paris.
REFERENCE
Puro, M. (2016), “Audit firm lobbying before the Financial Accounting Standards Board: An empirical study”, Journal of Accounting Research, 624-646.
Watts, R. L., & Zimmerman, J. L, (2016), “Towards a positive theory of the determination of accounting standards” Accounting review, 112-134.

Question 7 (a) All four items classified as CFOA
Partial Statement of Cash Flows for Damian Ltd for the year ended 31 March 2017
Cash flows from operating activities - Direct method:
Cash generated from operations
Cash Receipts 237500
Net cash (used in)/from operating activities 237500
Reconciliation as required by FRS-44 when using the direct method in the SCF
Profit/(Loss) for the year 356000
Non-cash items:
Deferrals/accruals of past or future operating cash receipts/payments:
Reverse items of income/expense classified as investing/financing activities:
Other:
Net cash (used in)/from operating activities 356000
Question 7 (a) All four items classified as CFOA continued:
Partial Statement of Cash Flows for Damian Ltd for the year ended 31 March 2017
Cash flows from operating activities - Indirect method:
Profit/(Loss) for the year 356000
Non-cash items:
32500
Deferrals/accruals of past or future operating cash receipts/payments:
Interet
Reverse items of income/expense classified as investing/financing cash flows:

86000
Reverse items of income/expense to be shown separately as CFOA:
Dividend
Cash generated from operations 237500
Net cash (used in)/from operating activities $
Question 7 (b) None of the four items classified as CFOA
Partial Statement of Cash Flows for Damian Ltd for the year ended 31 March 2017
Cash flows from operating activities - Direct method:
Cash generated from operations 356000
Net cash (used in)/from operating activities 356000
Cash flows from investing activities
Interest 14800
Net cash (used in)/from investing activities 14800
Net cash (used in)/from financing activities 118500
Cash flows from financing activities
Interest 32500
Dividend 86000

A/R 130 Balance b/d290
p L 100
Balance c/d260
390 390
Allowance for doubtful debts