FNSACC504 - Corporate Entity Financial Report Preparation

This assignment solution focuses on FNSACC504, which involves preparing financial reports for a corporate entity. It includes an analysis of general-purpose financial statements, reporting entities, and a case study of JB Hi-Fi's financial performance. The solution covers aspects of corporate governance, audit statements, shareholder information, and key financial statement components such as profit and loss, balance sheets, and cash flow statements. It further discusses ethical considerations for directors, funding options for expansion, equity and working capital definitions, and the implications of right issues. The document concludes with calculations related to profit retention and provides relevant references. Desklib offers this and many other solved assignments for students.

FNSACC504 - Prepare
financial reports for a
corporate entity

TABLE OF CONTENTS
QUESTION 1...................................................................................................................................3
QUESTION 2...................................................................................................................................3
QUESTION 3...................................................................................................................................3
QUESTION 4...................................................................................................................................4
QUESTION 5...................................................................................................................................6
QUESTION 6...................................................................................................................................6
QUESTION 7...................................................................................................................................7
REFERENCES................................................................................................................................8

QUESTION 1
The general purpose financial statements are the one under which financial statements are
released for large group of users. These general purpose financial statements include income
statement balance sheet and cash flow statements along with shareholders equity and all the
relevant disclosures (Song, Wang and Zhu, 2018). The major purpose of preparing the general
purpose financial statement is to share the information of company related to the profitability in
of the company to all the related stakeholders and interested party.
Reporting entities are the one which involves all the economic entities with respect of
which the existence of the users is dependent over the general purpose financial reports. Here the
reporting entity is the business that is having an obligation to prepare the financial reports for
benefits of the interested parties and stakeholders.
QUESTION 2
The present article deals with the fact that how JB Hi- Fi sales have increased. The chief
executive of JB Hi- Fi Terry Smart states that the volume of 2021 fiscal year was extra ordinary
and it would be very beneficial for the company for stop the company delivered its eighth
consecutive year of record profit growth in 2021. This was particularly because of the reason that
consumer switched from setting up the home offices on the mobile phones due to the current
pandemic. The net profit forecast has fallen to between 38 million to 410 million after 67.4%. in
addition to this the article also highlighted that the rivals like wesfarmers are improving their
business in order to reduce the sales of JB Hi- Fi (JB Hi- Fi sales soften after bumper year,
2021).
The major implication of this some financial implication is that the sales of the company
have been decreased. This was particularly because of the high competition and as a result of this
the profitability of the company has also reduced. Is there a possibility is that the sales of the
company has reduced and as a result of this profitability will also reduce.
QUESTION 3
1
JB Hi- FI
2

The main activities of the company are publicly listed Australian retailer dealing and selling in
consumer goods. The major products in which companies dealing are consumer electronics
appliances small appliances and all the related products and services. The company also deals in
different types of media and electronics along with video game related products like PlayStation
Xbox and many other different related outlets and stores (Tumwebaze and et.al., 2018).
3
The major purpose of corporate governance statement is to outline a proper structure which
needs to be followed by the company and the employees in order to complete the operations of
the company. The corporate governance statement of JB Hi- Fi outlines the fact that the business
is conducted ethically and should be in accordance with the highest standard of corporate
governance.
4
The major purpose of audit statement is that this assists the company in identifying the problems
and tries to rectify them within the financial statements and accounting framework. The auditor
of JB Hi- Fi is Deloitte which has been the external auditor of companies since 2002.
5
The largest shareholder of the company is JP Morgan nominees Australia and the numbers held
is 33842633 which is approximately 29.46 % of the total shares.
6
The one controlled entity of the company involves JB hi fi education solution Pty limited.
QUESTION 4
1
The financial statement included within the annual report are a statement for profit and loss and
comprehensive income, balance sheet statement, changes in equity and the statement of cash
flows (Jamil and Rosli, 2021).
2
All the statement provides information relating to the profitability, efficiency, liquidity and
solvency of the company. All these are necessary in order to analyse the profits which the
company has earned during the financial year.
3
448.0

4
189
5
Total current asset= 978.3
6
Total non- current liability= 688.6
7
Total shareholder equity= 1229.8
8
Total issued capital= 114883372
Holding Total Holders Units % Issued Capital
1 - 1,000 19,481 5,656,953 4.92
1,001 - 5,000 3,688 7,512,644 6.54
5,001 - 10,000 276 1,881,433 1.64
10,001 - 100,000 147 3,721,771 3.24
100,001 and over 23 96,110,571 83.66
23,615 114,883,372 100.00
9
S. Goddard
B. Laughton
M. Powell
R. Uechtritz
M. Wilson
(apptd 3/6/20)
R. Murray
G. Richards
(retd 30/6/20)
W. Tang
(retd 14/2/20)

Analysing ethical consideration from point of view of director is very essential in order to
solve conflict of interest. This is pertaining to the fact that there are different board of directors
within the company and there is probability of having complex. And ethical consideration needs
to be followed at time of dealing with conflicts.
With respect to confidentiality it is very essential for the directors to maintain proper
confidentiality. This is particularly because of the reason that any information must not be
relieved from company side and due to this confidentiality is the key to success.
For JB Hi- Fi to get successful it is very essential that all the necessary disclosure
requirements are being fulfilled within the annual report of the company. This is necessary in
order to ensure room that all the requirements are being disclosed in proper and effective manner
(Uwuigbe and et.al., 2018).
QUESTION 5
For the expansion of additional funds can be managed and maintained with help of
undertaking the use of debt. The reason for training to the fact that this table does not involve
any right of ownership to the money provider. Hence this will be beneficial for the company and
in accordance with the balance sheet as well the non- current liabilities are very less as compared
to the total of equity. Hence this can be increased rather than involving the equity shareholders.
Other than debt company can also go for equity financing in order to arrange the fund for
expansion. However the third source of funding for the company is to take commercial loans
from Bank. This is pertaining to the fact that bank loan is also good option for the company to
arrange for the finance. Does the reason for suggesting the reason software packages is to allow
the company to operate efficiently. This is pertaining to the fact that when it will be provided to
the company then they will be in position to work effectively.
QUESTION 6
1
The equity capital is being defined as the capital which is free of debt that is there is no
obligation of company to pay till the time company liquidates. On the other hand the working
capital is the one which is the daily requirement of the company to pay off all its day-to-day
expenses.
2

The right issue is the offer which company provides to the existing shareholders to buy the
additional shares of the same company.
3
45.79
4
236150
5
22.895
6
The competition may be the factor which has influence the price of the above right issue to be set
at 50% discount to the current market value of. This is pertaining to the fact that currently the
competition is too high and if the company will go to normal issue then there is possibility that
they will not get the money. Hence the right issue at a discounted price will attract the existing
shareholders to buy more of the shares.
7
5406654.25
8
Bank a/c DR
To equity capital
QUESTION 7
1
1345.9 + 700.7= 2046.6
2
50 % of 2046.6
= 1023.3
3
20 % more than the requirement that is 20 % 0f 1023.3= 206.66
4
The company is retaining a good amount of profits.

REFERENCES
Books and Journals
Jamil, N. N. and Rosli, S. N. A., 2021. DOES THE IMPLEMENTATION OF MALAYSIAN
PRIVATE ENTITY REPORTING STANDARD (MPERS) FOR SMEs AN ADDED
VALUE FOR FINANCIAL REPORTING IN MALAYSIA?. Academy of Accounting
and Financial Studies Journal. 25(2). pp.1-9.
Song, Y., Wang, H. and Zhu, M., 2018. Sustainable strategy for corporate governance based on
the sentiment analysis of financial reports with CSR. Financial Innovation. 4(1). pp.1-
14.
Tumwebaze, Z., and et.al., 2018. Corporate governance, internal audit function and
accountability in statutory corporations. Cogent Business & Management. 5(1).
p.1527054.
Uwuigbe, U., and et.al., 2018. Corporate governance and quality of financial statements: a study
of listed Nigerian banks. Banks & bank systems, (13, Iss. 3), pp.12-23.
Online
JB Hi- Fi sales soften after bumper year. 2021. [Online]. Available through:
<https://www.afr.com/companies/retail/jb-hi-fi-profit-soars-67-per-cent-to-506m-
20210802-p58f16>