Corporate Accounting Assignment: Helloworld Travel Ltd

Added on - 28 May 2020

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Running head: CORPORATE ACCOUNTINGCorporate AccountingName of the Student:Name of the University:Author’s Note:Course ID:
CORPORATE ACCOUNTING1Table of ContentsAnswer to Question 1:.....................................................................................................................2Answer to Question 2:.....................................................................................................................3Answer to Question 3:.....................................................................................................................4Answer to Question 4:.....................................................................................................................4Answer to Question 5:.....................................................................................................................6Answer to Question 6:.....................................................................................................................7Answer to Question 7:.....................................................................................................................8References:......................................................................................................................................9
CORPORATE ACCOUNTING2Answer to Question 1:Within a company’s balance sheet statement, there are three key items and one amongthem is deemed to be equity. Helloworld Travel Limited is not exempted from such item. Reliedon the company’s balance sheet statement for 2017, certain vital aspects encompass treasuryshares, issued capital, retained earnings and reserves. Issued capital is considered as the businessorganization’s equity (Armstrong et al., 2015). Issued capital is measured through multiplyingthe overall outstanding shares along with all its shares par value. The annual report of thecompany indicates that Helloworld Travel Limited’s issued capital has increased from$ 366,235in 2016 to $ 395,081in 2017.Another equity aspect that is mentioned within the company’s equity sectionencompasses reserves. It can be stated that reserves serves as a factor of equity in the companythat is considered as the additional amount other than basic share capital (Atanasov & Black,2016). The recent annual report of Helloworld Travel Limited indicates that reserves of thecompany have decreased from$ 163,051 in the year 2016 to $ 7,150in the year 2017. Anotheraspect within the equity section of the company encompasses retained earnings. It indicates totalprofit and loss of the company from the time the company came into existence which decreasedany dividends paid from the behalf of its shareholders. As per the annual report, it has beengathered that the company did not deal with any type of retained earnings and rather it hasencountered certain accumulated losses. Such accumulated losses of the company havedecreased from $ (292,218) in the year 2016 to $ (123,717) in the year 2017. This indicates thecompany experiences more losses in comparison to its profits (Graham et al., 2017).
CORPORATE ACCOUNTING3The last aspect of Hello world Travel Limited’s equity section is the treasury shares.These shares might take place because of shares buyback or they have not issued the same withinthe first place. Such shares do not have any type of voting rights along with the dividendpayments and for such reason, they are not considered within the outstanding shares computation(Graham et al.,2017). As per the balance sheet statement of Hello world Travel Limited of theyear 2017, the treasury share value is being constant at $ 123,717in both the years from 2016 and2017. For this reason, it indicates that the company has not repurchased shares from all itsshareholders.Answer to Question 2:In the current years, business companies experience several types of expenses thatinclude selling and administrative expenses and many more (Cheng, Ioannou & Serafeim, 2014).An organization does not offer its real percentage of taxation rate within its income statement.Tax expenses is deemed to be the last line aspect prior the calculation of net income and thecompany can recognize effective tax rate through observing other information within financialstatement. Tax expense can be deemed as a part of it. In addition, tax expense is taken intoaccount as a part of major liability of the company owing within the state along with municipaland federal government within the country. Tax expense is measured through multiplying thesuitable business tax along with income before tax after factoring certain key items such as non-deductible items, tax assets along with tax liabilities. In case of Helloworld Travel Limited, taxexpense of the company has dropped from $ (1,774) in the year 2016 to $(9,446) in the year2017 (Christensen et al.,2015). In case of increase in profit before income tax, the tax expense ofthe company is decreased because of tax provision reversal.
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