BAO2203 Assignment Corporate Accounting: Financial Issues
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Victoria University | Melbourne Australia
BAO2203 - Corporate Accounting (BAO2203)
Added on 2020-05-28
BAO2203 Assignment Corporate Accounting: Financial Issues
Victoria University | Melbourne Australia
BAO2203 - Corporate Accounting (BAO2203)
Added on 2020-05-28
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Running head: CORPORATE ACCOUNTINGCorporate AccountingName of the StudentName of the UniversityAuthor’s Note
1CORPORATE ACCOUNTINGTable of ContentsPart I.................................................................................................................................................2Answer to Question 1..................................................................................................................2Answer to Question 2..................................................................................................................2Answer to Question 3..................................................................................................................3Answer to Question 4..................................................................................................................3Part II...............................................................................................................................................4Introduction..................................................................................................................................5Literature Review........................................................................................................................5Conclusion...................................................................................................................................9References......................................................................................................................................11
2CORPORATE ACCOUNTINGPart IAnswer to Question 1In the recent years, it can be observed that Bellamy’s Australia Ltd has been facing somemajor financial issues due to many some specific reasons. The company has been facing tradinghalt of their shares as Certification and Accreditation Administration of the People’s Republic ofChina (CNCA) suspended the license of the company required for exporting milk formula fromthe plant of Melbourne. This particular aspect has affected the financial position of the companydue to the halt in share trading. There is another major issue for Bellamy’s Australia Ltd inrecent time. It has been observed that Bellamy’s Australia Ltd has requested Australian StockExchange (ASX) for the suspension of their shares and this decision has affected theirshareholders badly. The main reason of the suspension of their shares is the non-compliance withthe principles of continuous disclosure. According to Bellamy’s Australia Ltd, due to thissuspension, they will get enough time to manage their obligation for continuous disclosure.These are the two major aspects causing financial predicament for Bellamy’s Australia Ltd.Answer to Question 2The annual report of Bellamy’s Australia Ltd states that the company has not mentionedabout goodwill in their financial statements for 2016. The annual report also states thatBellamy’s Australia Ltd had some major acquisitions of segment assets in 2016. Bellamy’sAustralia Ltd has made assets acquisition of $ 719,000 in Australia; $ 25,000 combined in Chinaand Hong Kong; and $ 8000 in East Asia (annualreports.com 2018). According to the statementof financial position of Bellamy’s Australia Ltd, the company has $ 32,295,000 cash and cash
3CORPORATE ACCOUNTINGequivalent in 2016 as compared to $ 32,035,000 in 2015. Thus, a slight increase in cash positioncan be seen in 2016 as compared to 2015 (annualreports.com 2018).Answer to Question 3The profit and loss statement of Bellamy’s Australia Ltd shows the decreased level ofprofit for the company in 2017 as compared to 2016. Decrease in gross profit can be seen in2017 ($ 91,521,000) as compared to 2016 ($ 101,228,000) (investors.bellamysorganic.com.au2018). Things become worse when the company witnessed net loss of $ 809,000 in 2017 ascompared to a net profit of $ 38,328,000 in 2016. In 2017, Bellamy’s Australia Ltd had an assetimpairment loss of $ 424,000 as compared to a loss of $ 36,000 in 2016. Increase inadministrative and other costs can also be seen in the year 2017 from 2016. In addition, CNCAsuspended the milk-exporting license on Bellamy’s Australia Ltd from Melbourne plant(investors.bellamysorganic.com.au 2018). The authorities of China made suspension onregistration of the company’s Camperdown canning facility in Victoria on the month of July dueto a complaint from a third party on the quality issues.Answer to Question 4From the above discussion, it can be seen that the financial position of Bellamy’sAustralia Ltd has become worse in the year 2017. There are two major reasons for this. The firtsreason is the trading halt put by CNCA due to the suspension of milk exporting from Melbourneplant. The second reason is the request by the company itself to suspend share trade in due tonon-compliance with continuous disclosure framework. Because of all these aspects, thecompany has to face major losses in 2017. In this position, it is recommended to the clients tosell the shares of Bellamy’s Australia Ltd.
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