HI5020 Corporate Accounting: Comparative Analysis of ASX Companies

This report provides a comprehensive analysis of two ASX-listed companies, Perpetual Resources Ltd and Hill End Gold Ltd, focusing on their corporate accounting practices. It delves into the owners' equity, comparing contributed equity, retained earnings/accumulated loss, and reserves for both companies across different years. The report also examines the cash flow statements, explaining each item and the reasons for changes in cash flows from operating, investing, and financing activities. A comparative analysis of the companies based on their cash flow statements is presented, followed by a discussion on other comprehensive income. Finally, the report touches upon accounting for corporate income tax, providing a thorough overview of the financial reporting of these two companies. Desklib provides access to similar solved assignments and past papers for students.

CORPORATE ACCOUNTING 1
CORPORATE ACCOUNTING

CORPORATE ACCOUNTING 2
Contents
Executive summary:............................................................................................................................3
Introduction:........................................................................................................................................3
Owners’ equity:...................................................................................................................................3
Part I:...............................................................................................................................................3
Part ii:...............................................................................................................................................6
Cash flow statement:...........................................................................................................................6
Part iii:..............................................................................................................................................6
Part IV:...........................................................................................................................................13
Part v:.............................................................................................................................................14
Other comprehensive income statement:.........................................................................................14
Part VI:...........................................................................................................................................14
Part vii:...........................................................................................................................................15
Part viii:..........................................................................................................................................15
Part ix:............................................................................................................................................15
Accounting for corporate income tax:.............................................................................................15
Part x:.............................................................................................................................................15
Part xi:............................................................................................................................................15
Part xii:...........................................................................................................................................16
Part xiii:..........................................................................................................................................16
Part xiv:..........................................................................................................................................16
Part xv:...........................................................................................................................................17
Part xvi:..........................................................................................................................................18
References:.....................................................................................................................................19

CORPORATE ACCOUNTING 3
Executive summary:
This assignment has been prepared to make a brief analysis of two ASX listed companies
belongs to the same industry. The selected companies are Perpetual Resources Ltd and Hill
End Gold Ltd. In this report, we will discuss the cash flow statement, owner’s equity,
effective tax rate etc. On the basis of the annual report of the selected companies, we have
analyzed the transaction reported by the company.

CORPORATE ACCOUNTING 4
Introduction:
In the present era there is huge improvement in the reporting of the financial transaction of
the company. The users of the financial statement through reading and analysing of the
financial statement can obtain the insight of the business. In the report we will analyse the
reporting of the shareholder equity of the Perpetual Resource limited and Hill End Gold Ltd
and changes in the item over the past. It also analysis changes in the debt position of the
company in the recent past. Further the report discusses the items of the cash flow and the
way liquidity position of the company can be identified through analysing each item of the
equity. The report also states the reporting of the other comprehensive statement of both the
company and the reason why the items are not reported as regular operation. The reporting of
the taxation of the both the company can also be understood in the report.
Perpetual Resources Ltd
Perpetual Resources Limited was founded in the year 2011 with headquarter situated at
NSW, Australia. The company as nagged in the business of exploration of the gold project.
The main purpose or focus of the company is to implement the exploration and development
of a program for A to Z project.
Hill End Gold Ltd
The company has been founded in the year 1996 with headquartered situated at Sydney,
Australia. Hill End Gold Ltd is also spread geographically with their subsidiaries such as
Pure Alumina Pty Ltd, Hegel Investments Pty Ltd. The company has mainly been engaged in
the exploration of gold across Australia (Hillendgold.com.au. 2018).
Owners’ equity:
Part I:
As required, the following table briefly interprets the Owner’s Equity of the selected
companies:
Perpetual Resources Ltd
Owner's equity:
(Amounts in $000 )
Particulars 2017 2016 Understanding Change Ch
ang

CORPORATE ACCOUNTING 5
e in
%
Contributed
Equity
248712 247718 contributed equity
means the amount of
invested by the
shareholders of the
company in
exchange for shares
the slight increase in
contributed earning is
due to issue of shares
by the company in the
year ended 2017
0.4
0%
Retained
Earnings
6541 -1635 It depicts the amount
of Money retained
with a purpose to
meet future
contingencies. This
amount arises as a
result of the transfer
of a portion of profit/
loss earned during
the year
such a huge change is
due to the profit earned
during the year BT
Perpetual Resources,
however, there was a
loss in the previous
year that led
accumulated loss for
the periods
-
500
%
reserves 22707 9676 As the name
suggests, it is a
reserve kept aside by
every corporations
per the law.
Reserves have a direct
connection with profit/
loss earned during the
year. Hence increase in
reserve is mainly due
to the conversion of
loss to the company
into profit for the
period ended 2017
135
%
Total 277960 255759
(Annual Report, 2017).

CORPORATE ACCOUNTING 6
Hill End Gold Ltd:
Owner's equity:
(Amounts in $ )
Particulars 2017 2016 Understanding Change Change
in %
Contributed
Equity
76530051 74908934 contributed equity
means the amount
of investment by
the shareholders of
the company in
exchange for
shares
the increase in contributed
equity shares shows the
additional issue of shares
during the year by
Perpetual resources
limited
2.16%
Reserves 212121 135539 As the name
suggests, it is a
reserve kept aside
by every
corporations per
the law.
The increase shows the
transfer of profit during
the year to the reserve
account. It directly means
the profit has been
increased over the year
56.50%
Accumulated
Loss
-59322550 -58102463 As the name
predicts, it means
the loss
accumulated over
the years. It is due
to a deficit of the
company
it depicts that accumulated
loss is greater than the
accumulated profit that
resultant led to negative
balance & the same has
been increasing due to an
increase in a loss during
the year 2017
2.10%

CORPORATE ACCOUNTING 7
Total 17419622 16942010
(Annual Report, 2017).
Part ii:
As required, the following table interprets the comparative analysis of equity & debt of the
selected companies:
Perpetual
Resources Ltd
Hill End Gold
Ltd
Particulars 2017 2017
(Amounts in
$000 ) Amounts in $000 )
Contributed Equity 2,48,712 76,530
Retained Earnings/
Accumulated loss
6,541 -59,323
Reserves 22,707 212
Total 2,77,960.00 17,419.62
(Annual Report, 2017).
Cash flow statement:
Part iii:

CORPORATE ACCOUNTING 8
As required, below table explains each item of cash flow statement along with their
understanding and reason for changes for the selected companies:
Perpetual Resources Ltd
Cash flow statement:
(Amounts in $000)
Particulars 2017 2016 Understanding Reason for
Change
Change
in %
Cash flows
from operating
activities:
Distributions/
dividend
received
6,547 9,043 It refers to the amount
of money received as
dividend/ distribution
during the year 2017 by
the company on the
investments.
here, the decrease
is mainly due to the
announcement of a
dividend made by
the investee
company
-27.60%
Interest received 911 565 it depicts the amount of
money received an
interest income against
the investments
it is mainly due to
increase in
investment made
during the year
2017
61.24%
other income 216 258 it refers to other
income such
commission etc from
the increase/
decrease depends on
the activities
performed
-16.28%

CORPORATE ACCOUNTING 9
the customers
Payment of
management fee
-3,011 -2,836 it refers to the amount
expended during the
year against
management fee
due to inflation 6.17%
paid income tax -3,251 -669 it is the liability of
every corporation
payable to the
government in respect
of the income earned
during the year
since the company
has significantly
earned a profit
during the year
ended 2017,
consequently the
income tax payable
has been increased
386%
Other expense
paid
-1,617 -1,341 it refers to other
expenditure incurred to
run the operating
activities such as
salaries, bills etc
the increase/
decrease depends
upon activities
reformed during the
year
20.58%
Net cash
provided by
operating
activities
-205 5,020
Cash flows
from investing
activities:
Proceeds due to
sale of
investment
2,71,650 3,23,038 it means the amount
received as a result do a
sale of investment by
the company during the
eyar2017
It is due to the
market value of an
investment which
has been sold during
the year by the
-15.91%

CORPORATE ACCOUNTING 10
company.
purchases of
various
investments
-2,58,761 -2,88,113 As clearly depicts, it
refers to the amount
paid for the purchase of
an investment that
increases the interest
income of the company
it is due to the
decision of the
management of the
company in regard
to investments
-10.19%
Net cash used
in investing
activities
12,889 34,925 -63.10%
Cash flows
from financing
activities
payment of
dividend
-9,613 -3,050 It means the amount of
money paid by the
company to their
shareholders as a
dividend during the
year ended 2017.
There is such a
high increase. This
is s because the
company has earned
a profit during the
year 2017 which
was a loss in the
year ended 2016
215%
proceeds from
the exercise of
options
- 1,348 it refers to the amount
received on exercising
options purchased
previously
All options are set
off in the years 2016
-100%
Net cash used
in financing
activities
-9,613 -1,702

CORPORATE ACCOUNTING 11
The net increase
in cash and cash
equivalents
3,071 38,243 Aggregated cash for
the year from activities
Cash and cash
equivalents at
the start of the
period
58,350 20,107 cash at the beginning
of the year
Cash and cash
equivalents at
end of the
period
61,421 58,350 Net cash at the end of
the year
(Annual Report, 2017).
Hill End Gold Ltd:
Cash flow statement:
(Amounts in $ )
Particulars 2017 2016 Understanding Reason for
Change
Change
in %
Cash flows from
operating activities
Interest Received 5313 6277 it depicts the
amount of
money received
an interest
income against
the investments
the decrease
is due to the
sale of
investment
by the
company
-15.36%
Other income received 0 9367 it means the there is no -

CORPORATE ACCOUNTING 12
amount of
money received
as a result of
other income
such as
commission etc
from the
customers
other income
earned by the
company for
the year
ended 2017
100.00%
Payment to supplier &
employees
-970948 -
990322
the amount of
money paid o
vendors etc for
running the
operating
activities of
every company
Changes
directly
depend upon
the type &
nature of
services
taken
-1.96%
Net cash flows used
in operating activities
-965635 -
974678
Cash flows from
investing activities
Proceeds from the sale
of shares
0 657442 it refers to the
money received
as a sale of
shares during
the year
no such sale
transaction
has taken
place for the
year ended
2017
-
100.00%
Payment for
exploration bonds
0 41519 it is a type of
investments
made by the
company for
exploration
bond
no such
investment
made in the
eyras ended
207 by the
company
-
100.00%
proceeds from the 0 60600 it refers to the no such sale -