Financial Accounting Homework Solutions - University of ABC

This document provides comprehensive solutions to a financial accounting homework assignment. The solutions cover various topics, including plagiarism, steps in Excel, relevant accounting websites, interpretation of annual reports, and a detailed analysis of a company's computing environment. The assignment also includes solutions for key accounting concepts like balance sheets, cash flow statements, profit and loss statements, and ethical issues related to corporate governance. Furthermore, the document presents solutions for manual calculations, spreadsheet solutions, and formula views for different accounting problems. The assignment also addresses topics like debit and credit balances, current and non-current liabilities, current ratios, adjusting entries, and a crossword puzzle related to accounting terms, providing a complete overview of accounting principles and practices.

Question 1 Solution
Plagiarism is the act of taking someone else’s work or ideas and passing them of as your own,
without their consent or knowledge (Oxford Dictionary, 2017). Plagiarism and collusion is unfair
to honest students because they have put in the time and effort to produce this work yet plagiarist
just copy and paste. Plagiarism is therefore wrong. (Bishop, 2017).
Question 2 Solution
Steps
In Excel Select the data you want to copy and paste
Click page layout tab
Under headings, check print
Select the data you want to copy and paste
Under Home tab, click copy as picture and select “ As shown when printed”
In Word, move cursor to position and press crtl+v or click paste under home
Formulas
Similar to above however one extra step in excel- go to formulas tab in Excel and click show
formulas.
Normal view
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C D E
A B Total
21 20 41
22 45 67
23 57 80
Formula view
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C D E
A B Total
21 20 =C3+D3
22 45 =C4+D4
23 57 =C5+D5

Question 3 Solution: Websites relative to Accounting
https://www.accountingcoach.com/ This is a free learning website that is suited for students,
book keepers and businesses.
http://investopedia.com This website provides financial content, marketing news
and education
http:// www.aasb.gov.au This body sets the standards for Australian accounting
http://www.pwc.com/ This website offers financial services, however it can
also be used as a resourceful site for information on the
economy and trends.
http://www.cpaaustralia.com This website provides education, training and technical
support to accountants
Question 4 Solutions
CPA Accounting Australia Resource – Understanding Annual Reports
The website has provided guidelines on how to interpret Australian, Malaysia and New Zealand
financial reports to clients and their significance. (CPA Australia, 2017)
Question 5 Solutions
At my current work environment, my employer operates up to 100 workstations to enhance
communications, greater productivity, research, IT and administrative functions. They systems
accompanied by other work alone computers, are connected to the Info-set network, which is our
companies network, and then to the internet. Intel, Dell, Mac and Toshiba are amongst the
prominent vendors of the workstations. The systems are all connected together to the backbone
of the company network.
The administration network comprises of a number of virtual machines. The machines main
purpose is timesharing and mail servicing and provides database warehousing. The computing
environment differs from department to department. For example, the administration department
uses a blend of Macs and PCs. The programming department of the company uses access
platforms such as SGI, HP, IBM, DEC, Mac and Intel.

The network is switched and consists of ten VLANs. It is comprised of HP and Juniper switches
and routers. The building therefore has gigabit networking and a connection to the computer
backbone.
The Company has a networked workstation for everyone within the office. The networked
workstations are for senior staff and selected junior staff with various workloads. Most of the
workstations run a version of Unix though some of the staff use Mac.
In case of breakdown or failure of the IT functions, there are additional two machines, Xenons,
which have the responsibility of handling office mail and reading newsgroups.
A feature of our working environment is that you get an email address that is potentially
permanent with a domain name. The email address can forward your mail to whichever
computer you are using to read your email.
In conclusion, my current computing environment appears complex, but it has ensured an
efficient work environment for all staff members, enabling them to work in the office and
remotely.

Question 6 Solutions- Business Report
1. Introduction
1.1 Background
ABC Learning Company was founded in 1988 as a stable company. In 2001, the
Australian government introduced the Childcare Benefit Rebate System.
Following this directive, ABC acquired child care centers across the country and
went through a massive growth expansion with share prices reaching $8.60.
However, this growth did not last. By the end of 2007, the company went through
a drastic change of events. ABC’s assets and share prices fell to $0.54 causing it
to be placed under Administrators in November 2008 (Koch, 2009).
1.2 Purpose
The Purpose of this business report is to provide information on ABC’s Financial
Reports, and explore the key lessons from their downfall and 3 ethical issues.
2. Major Financial Reports
The major financial reports are-
 Balance Sheet-The Balance Sheet is also known as the Statement of Financial
position. It displays the current financial position of a company at a specific date.
 Cash Flow Statement- The Cash flow statement tells us how much money is
flowing in and out of the business from the 3 main activities i.e. investing,
operating and financing.
 Profit and Loss- The Profit or Loss statement or Statement of Income shows us
how the company is using its assets to make profits over a defined period.
Furthermore, it explains the change in net assets a company owns between start
and end of reporting period (Koch, 2009).
3. Key Lessons from ABC Learning
The rise and fall of ABC Learning Childcare Center can be blamed on aggressive
expansion backed by lack of discipline. As a result, some of the key lessons we can
learn from the ABC story include the following:
 Always Recognize Revenue Properly
ABC cooked revenue figures for its leases and employee contracts, making it
appear as if it was experiencing growth.
 Focus on Core Activities

Due to lack of attention, the overseas locations in US, New Zealand and
Singapore ended up not performing well. This resulted in the company selling of
these subsidiaries and a fall in share price.
 Importance of a Company’s financial accounts in indicating its health
Investor’s did not pay close attention to the published accounts which showed red
flags.
 Importance of Sound Corporate Governance
ABC did not disclose its related party transactions with Queensland Maintenance
and .Furthermore, Eddie Grove did not disclose margin loans
 Complex financial structure and transaction
ABC Learning’s transactions were too complex for financial investors and
regulators to understand.
4. Identify three Ethical Issues
 Compliance and Governance
The company did not comply with accounting rules such as disclosure and Board
scrutiny
 Individual Power
Eddy Groves was a sole decision maker and he made decisions that eventually led
to the collapse.
 Transparency
ABC was not transparent in its financial transactions. Furthermore, they inflated
revenues and were not disclosing related third party transaction.
Summary
The story of ABC teaches us the risk of improper valuations coupled with bad
financial decisions can lead to the collapse of an organization. Therefore, it is prudent
for a business to go with the best estimate and ensure proper accounting practices.
References
Koch, D. (2009, November). The ABC of a Corporate Collapse. CPA Australia. Retrieved from
https://www.youtube.com/watch?v=YYF6JW9vJKo&list=PL12C0ADD577F6B741Jjj

Question 7 Solutions :PALER
A. Manual Solutions using office lens

B. Spreadsheet Solution
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B C
Account PALER
Loan Payable Liability
Rent Expense Expense
Cash Asset
Office Supplies Asset
Salary Expense Expense
Salaries Payabe Liability
Property Tax Expense Expense
Prepaid Expense Asset
Office Furniture Asset
Electricity and Gas Expense Expense
Accounts Payable Liability
Amy Capital Proprietorship
Service Revenue Revenue
Accounts Receivable Asset
Supplies Expense Expense
Investments Asset

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B C D
$
Service Revenue 155,800
Less: Operating Expenses
Rent 33,000
Salary 49,000
Supplies 33,600
Property Tax 1,700
Electricity and Gas 6,500
Total 123,800
Net Income 32,000
Amount of Owner Drawings 4,100.00$
Balance Sheet as at 31 Dec 2016
$
Assets
Current Assets
Cash 6,500
Accounts Receivable 9,200
Office Supplies 3,300
Prepaid Expenses 8,000
Office Furniture 28,000
Total Current Assets 55,000
Non Current Assets-Investments 5,000
Total Assets 60,000
Liabilities and Owner's Equity $
Accounts Payable 2,400
Salaries Payable 2,400
Loan Payable 12,300
Total Liabilities 17,100
Total Owner's Equity 42,900
Total Liabilities and Owner's Equity 60,000
Income Statement for year ended 31 December 2016

Question 8 Solutions: Balance Sheet Equation
A. Manual solutions using Office Lens

B. Spreadsheet Solution
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B C D E F G H I J
Data
Revenue 600 K 850 2040
Expenses 300 300 1480
Dividends declared 0 45 Q 350
Additional Investment by Stockholders 0 60 460
Net Income E 300 550 P 560
Retained Earnings
Beginning of year 110 650 2240
End of Year D 410 J 1155 2450
Paid in Capital
Beginning of year 155 172 N 2200
End of Year C 155 H 232 2660
Total Assets
Beginning of year 360 F 1072 L 5110
End of Year 700 1570 M 6000
Total Liabilities
Beginning of year A 95 250 670
End of Year B 135 G 183 890
Report
Revenue =D9 K =G33+G30 =J9
Expenses =D10 =G10 =J10
Dividends declared =D11 =G11 Q =J35+J33-J36
Additional Investment by Stockholders =D12 =G12 =J12
Net Income E =D29-D30 =G13 P =J29-J30
Retained Earnings
Beginning of year =D15 =G15 =J15
End of Year D =D33+D35-D31 J =G35+G33-G31 =J16
Paid in Capital
Beginning of year =D18 =G18 N =J39-J32
End of Year C =D38+D32 H =G38+G32 =J19
Total Assets
Beginning of year =D21 F =G44+G38+G35 L =J44+J38+J35
End of Year =D22 =G22 M =J45+J39+J36
Total Liabilities
Beginning of year A =D41-D38-D35 =G24 =J24
End of Year B =D42-D39-D36 G =G42-G39-G36 =J25
case 1 case 2 case 3
case 1 case 2 case 3

Question 9 Solutions
Debit Balances
 Assets e.g. cash, receivables
 Expenses- e.g. wage expense
 Drawings
 Losses
Credit Balances
 Liabilities
 Revenue
 Gains
 Owner equity
Question 10 Solutions
A. Manual Solutions using Office Lens