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The Financial State Meme of the University Author

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Added on  2020-05-16

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CORPORATE ACCOUNTING CORPORATE ACCOUNTING 1 Corporate Accounting Name of the Student Name of the University Author Note Answer to question 1 2 Answer to question 2 2 Answer to question 3 3 Answer to question 4 4 Answer to question 5 4 Answer to question 6 5 Answer to question 7 5 Reference List 7 Appendices 9 Appendix 1 9 Appendix 2 10 Answer to question 1 The financial statements help in getting a better view of the position of the companies with respect to finances that is represented

The Financial State Meme of the University Author

   Added on 2020-05-16

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Running head: CORPORATE ACCOUNTINGCorporate AccountingName of the StudentName of the UniversityAuthor Note
The Financial State Meme of the University Author_1
1CORPORATE ACCOUNTINGTable of ContentsAnswer to question 1.......................................................................................................................2Answer to question 2.......................................................................................................................2Answer to question 3.......................................................................................................................3Answer to question 4.......................................................................................................................4Answer to question 5.......................................................................................................................4Answer to question 6.......................................................................................................................5Answer to question 7.......................................................................................................................5Reference List..................................................................................................................................7Appendices......................................................................................................................................9Appendix 1...................................................................................................................................9Appendix 2.................................................................................................................................10
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2CORPORATE ACCOUNTINGAnswer to question 1The financial statements help in getting a better view of the position of the companieswith respect to finances that is represented in the balance sheet. The owner’s equity, liabilitiesand assets is considered to be the primary items that come in the balance sheet of the company.The current annual report of Energy Resources Australia Ltd. shows the major items under theheading of ‘Equity’, which consists of Reserves, Retained Earning and Issued Capital (Cohen-Cole & Martinez-Garcia, 2013). The annual report of the company shows the amount of issuedcapital that has remained the same that is $ 706 million in both the financial years. The primarypurpose of the equity shares is to fulfill the requirement of capital within the company. it can beseen that the earning per share of the company had decreased from $53.2 that was in 2015 to52.4 in 2016 ("2016 Annual Report - Energy Resources of Australia", 2018). The other item thatis present in the equity of the company is reserves. Reserves are considered to be the excessamount that is paid by the shareholders apart from the nominal price of the shares. The equityreserve for the company in 2015 was $ 389 million, which decreased to $ 389 million in the year2016. The company does not have any other reserve under that head in the year 2016. The lastitem under the head equity for the company is the accumulated loss, which showed an amount of$ (626 million) in the year 2015 that increased to ($ 897million) in the year 2016. Answer to question 2When the business carries out its operations, the companies have to incur variousexpenses such as operating expenses, administrative expenses, selling expenses and others. Thetax expenses are usually one of the items that the companies have to incur for the smoothoperation of the business. The tax expenses can be formulated by multiplying the tax of the
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3CORPORATE ACCOUNTINGbusiness with the income that the company had before the tax was paid after the reconciliation ofthe tax has been done (Burman & Phaup, 2012). It is necessary for Energy Resources Australiato calculate their taxes in a correct way so that it can be paid accordingly on an annual basis.With respect to this, the company has to pay the tax expenses to the state and the federalgovernment as well. The Australian Taxation Law issued 30 percent of tax for the companiesthat are doing business in Australia. The expenses related to income tax for the company in 2015was $ 195 million and the annual report do not show any record for the income tax expense ofthe company for the year 2016 ("2016 Annual Report - Energy Resources of Australia", 2018). Answer to question 3The current annual report of Energy Resources Ltd. shows the profit before tax for thecompany as $ 79 million in the year 2015 and $ 271 million in the year 2016. The companyfollows 30 percent rate of tax in both the years. Thus, the expenses of tax for the company haveto be ($ 79 million * 30%) that is $ 23.7 million for the year 2015 and ($ 271 million * 30%) thatis $ 81 million in the year 2016. Nevertheless, as per the income statement of the company, theamount of expense that was considered as tax was $ 195 million in the year 2015 where in theyear 2016 the company did not record any of it ("2016 Annual Report - Energy Resources ofAustralia", 2018). Therefore there has been a difference in the amount of tax that was paid by thecompany. This can be due to various factors, which may result in showing the differencebetween the income taxes of the company. The first reason is the difference between the rate oftax in the overseas market and the Australian market. The next reason can be amortization andthe non-deductible depreciation. The company had paid $1.1 million as depreciation andamortization in the year 2015 and $37 million in the year 2016, which has to be added back to
The Financial State Meme of the University Author_4

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