Financial Accounting 1 Assignment Solution: University Name

This financial accounting assignment solution covers several key areas of financial reporting and accounting practices. The solution begins with a letter to the International Accounting Standards Board (IASB) discussing the importance of effective communication and fiscal report information, with a focus on the annual reports of two banks, ANZ and Westpac. It then presents detailed journal entries for share transactions, including share applications, allotments, calls, forfeitures, and reissues, along with supporting workings. The assignment also includes comprehensive calculations and journal entries related to current and deferred tax, providing worksheets and explanations for taxable income, temporary differences, and deferred tax assets and liabilities. The solution demonstrates how to account for various expenses and revenues, including depreciation, doubtful debts, warranties, and government grants, ensuring that students gain a thorough understanding of the accounting principles involved. The assignment is designed to help students understand the complexities of financial accounting and reporting.

Running head: FINANCIAL ACCOUNTING
Financial accounting
Name of the University
Name of the student
Authors note

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FINANCIAL ACCOUNTING
Table of Contents
Answer 1:.........................................................................................................................................2
Answer 2:.........................................................................................................................................5
Answer 3:.......................................................................................................................................10
Requirement i:...........................................................................................................................10
Requirement ii:..........................................................................................................................13
Requirement iii:.........................................................................................................................14
Answer 4:.......................................................................................................................................18
Answer 5:.......................................................................................................................................22
Bibliography..................................................................................................................................25

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FINANCIAL ACCOUNTING
Answer 1:
To,
The Chairperson
International Standard Accounting Board
30 Canon Street, London- EC4M 6XH, United Kingdom
Date: September 15, 2017
Subject: Guidance and Recommendations in order to improve the effectiveness of
communication and the fiscal report information
Respected Sir,
This is to bring to your attention that as an investor, I have the intention of making
several plans, concerned to the propositions that have been made by the IASB, with the regard
to the effectiveness of the information which are observed to be collected in fiscal report. I have
considered the possibility of making investments in the two ASX listed organizations, the two
organizations comprising of the ANZ bank as well as the Westpac. For the purpose of investing,
to know better about the prospects of each of the two above-mentioned organizations, I have
reviewed and compared their prospects with respect to the annual report of each of the two
enterprises in the current period. After a thorough study of the two reports I felt that, the relevant
information have not been appropriately depicted in the reports. Although the financial reporting
has improved comparatively to some extent, there are still many avenues and scopes of
improvements. Especially in the areas of presentation of the information and the disclosure of

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FINANCIAL ACCOUNTING
those information which are of high significance, needs to be emphasized upon for
improvements and improvisations. In the report, robust link among the information should be
created and it goes beyond the explanation of the nature of linkage and highlight of the
connections of the related disclosure places.
It may so happen in some cases that the investors could not understand the significant and
relevant information, which are in the annual report of an organization already, and this can be
attributed to the poor data presentation skills in the report. For me, personally, it is of great
importance to ensure the need to make relevant communication of the relevant information,
based on the annual reports of the two organizations of my interest, the Westpac and the ANZ
bank. The presence of disparities and differences in the presentation of the information in the
annual reports of both the companies can be a loophole. The preparation and presentation of the
fiscal reports and the disclosure of the important and relevant information to the concerned
investors, require some standardization of the way of presentation in the report. I have made
myself familiar with the seven rules that have been stated in the second section of that of the
discussion paper. These rules involve the usage of a format which is clear and comparable and
which is not burdened with unwanted duplications. The format, as the rules suggest, should also
have the ability to highlight those matters and information, which are significant. Therefore, after
analyzing the annual reports of both the companies, keeping in mind this set of seven rules, it can
be asserted that very few of the guiding principles are in compliance with both the annual reports
and the reports also does not include all the parts appropriately.
Banks, being financial enterprises, need to clearly disclose the risks they endure with
respect to credit as well as liquidity. Proper disclosure of this information absolutely mandatory
for the renowned banks in order to maintain their reputation and good will in the financial

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FINANCIAL ACCOUNTING
markets. This has to be done so as to portray the financial health of the organization clearly,
which the organization obtains by adopting the effectiveness principles as mentioned above,
which are not present in this case. Westpac has segmental analysis done, with proper and
consistent definitions of the segments. However, this is nowhere present in the analysis
performed by the ANZ bank. To strengthen the regulations prevailing in the banking sector,
incorporation of Basel is required, which is a cumulative set of the reformative steps. The Basel,
as I found out after extensive study, also has several disclosures of the requirements to be
provided in the fiscal report. In the notes regarding the economic statements, little credit and
liquidity risks related information were mentioned. In the case of Westpac, the disclosure of the
requirements was appropriate and existing. Along with that, the Basel related information and
the risk related facts in the banking industry were also mentioned. The annual report of Westpac
also had relevant information about Tiers, though all of this information were strikingly lacking
from the annual report of the other organization. The annual report of Westpac has also shown
divisional performance of the company appropriately, unlike that of the report of the ANZ bank,
which has not highlighted any of the above-mentioned categories.
Graphical representations of fiscal data and other performance indicators can be another
effective way of presenting the health of any economic and financial enterprise in its annual
report, as it helps the investors to easily understand the company scenario. Graphical
representations over narrative disclosures help the information to stay relevant as the information
do not have the risk to get redundant like in the cases of narrative disclosures. Therefore, in this
context, I felt that both the annual reports of the two organizations needed to implement this
graphical form of data presentation in order to improve their annual reports’ quality.

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FINANCIAL ACCOUNTING
The forward-looking information and the targets, which the company strives to achieve
(in quantitative terms), should also be incorporated in their annual reports in order to measure
their performances in a strategic objective framework with several pre-set goals for the
companies. To achieve the communication targets a combination of the investors should also be
considered by the company. The range of core products as well as the targeted development of
the potential specific segments can also be beneficial for the enterprise. The presentation of other
information apart from the fiscal ones can also be helpful to compare the decision-making
qualities of the organizations.
The usage of appropriate formatting, which is relevant to the mode and level of
perceptions of the shareholders, can also improve the communication effectiveness and various
reports, in this context, have been published with the usage of graphical as well as empirical
evidences.
Hereby, taking reference of the above discussion, I will emphasize on the need to
implement appropriate formatting to improve the effectiveness of communication, as it facilitates
easy understanding and analyzing of the situations on part of the investors. As an investor, I
would also like to recommend the implementation of principles, which aim proper
communication. These principles and their feasibility in this context can only be incorporated
after proper analysis of the two annual reports.
Answer 2:
In the books of Harriette Ltd.
Journal Entries
Dr. Cr.

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FINANCIAL ACCOUNTING
Date Particulars Amount Amount
31/03/2017 Bank A/c. Dr. $8,200,000
To. Preference Share
Application A/c.
$1,600,000
To. Ordinary Share
Application A/c.
$6,600,000
(Being application money received for 2,000,000
ordinary shares and 1,000,000 preference shares)
15/4/2017 Preference Share
Application A/c.
Dr. $1,600,000
To. Preference Share Capital
A/c.
$1,600,000
(Being application money received for pf. Shares
transferred to Pf. Share capital)
Ordinary Share
Application A/c.
Dr. $6,600,000
To. Ordinary Share Capital
A/c.
$6,000,000
To. Ordinary Share Allotment
A/c.
$600,000

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FINANCIAL ACCOUNTING
(Being application money received for ordinary
share capital transferred to ordinary share capital
and excess amount adjusted with due allotment)
Ordinary Share
Allotment A/c.
Dr. $3,000,000
To. Ordinary Share Capital
A/c.
$3,000,000
(Being allotment money due on alloted shares)
15/5/2017 Bank A/c. Dr. $2,400,000
To. Ordinary Share Allotment
A/c.
$2,400,000
(Being due allotment money received)
1/8/2017 Ordinary Share Call
A/c.
Dr. $1,000,000
To. Ordinary Share Capital
A/c.
$1,000,000
(Being call money due on alloted shares)
1/9/2017 Bank A/c. Dr. $975,000
Calls-in-Arrear A/c. Dr. $25,000

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FINANCIAL ACCOUNTING
To. Ordinary Share Call A/c. $1,000,000
(Being due call money received except for 50000
shares)
15/9/2017 Ordinary Share Capital
A/c.
Dr. $250,000
To. Calls-in-Arrear A/c. $25,000
To. Ordinary Share Forfeiture
A/c.
$225,000
(Being the 50000 shares, for which call money is
due, forfeited accordingly)
Bank A/c. Dr. $210,000
Ordinary Share
Forfeiture A/c.
Dr. $40,000
To. Ordinary Share Capital
A/c.
$250,000
(Being the forfeited shares reissued for $4.20 per
shares)
Cost of Forfeiture &
Reissue A/c.
Dr. $7,500
To. Bank A/c. $7,500

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FINANCIAL ACCOUNTING
(Being cost of forfeiture and reissue of shares paid)
Ordinary Share
Forfeiture A/c.
Dr. $185,000
To. Cost of Forfeiture &
Reissue A/c.
$7,500
To. Capital Reserve A/c. $177,500
(Being the balance of share forfeiture a/c. after
adjusting with cost of forfeiture and reissue
transferred to capital reserve)
Working shown:
Particulars Nos. Of
Shares
Value per
Share
Amount
Pf. Share Application Received A 800000 $2 $1,600,00
0
Ordinary Share Application
Received
B 2200000 $3 $6,600,00
0
Ordinary Share Application
Alloted
C 2000000 $3 $6,000,00
0
Ordinary Share Application
Adjsuted
D=B
-C
200000 $3 $600,000

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FINANCIAL ACCOUNTING
Ordinary Share Allotment Due E 2000000 $1.50 $3,000,00
0
Ordinary Share Allotment
Received
F=E-
D
1800000 $2,400,00
0
Ordinary Share Call Due G 2000000 $0.50 $1,000,00
0
Ordinary Share Call Received H 1950000 $0.50 $975,000
Calls-in-Arrear I 50000 $0.50 $25,000
Share Capital Forfeited J 50000 $5 $250,000
Share Forfeiture K=I-
J
50000 $225,000
Share Capital received fro
Reissue
L 50000 $4.20 $210,000
Share forfeiture adjusted with
reissue
M=J-
L
50000 $40,000
Answer 3:
Requirement i:
Worksheet for Current Tax Liability/(Refundable):
Particulars Amount Amount

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FINANCIAL ACCOUNTING
Accounting profit before tax $66,000
Add:
Doubtful Debt Expense $5,000
Annual Leave $23,000
Warranty Expense $12,000
Depreciation Expense for accounting
purpose
$60,000
Insurance $40,000 $140,000
$206,000
Less:
Government Grant $20,000
Bad debt expense $1,000
Annual Leave Paid $3,000
Insurance Paid $50,000
Warranty Expense Paid $2,000
Depreciation Expense for Tax Purpose $50,000 $126,000
Taxable income $80,000
Tax on taxable income @30% $24,000
Less: 30% Tax paid on Sales Revenue $205,800
Income Tax Refundable ($181,800