Comprehensive Analysis of Toy Market Pty Ltd Financial Statements

In this case study analysis, students will scrutinize Toy Market Pty. Ltd.'s financial statements for the year ending 30th June 2017. The task includes evaluating accounting profit calculations by incorporating various adjustments like annual leave expenses, bad debts, depreciation, rent, and sundry expenses. It also involves understanding directors' declarations in alignment with corporate regulations, reviewing accountant's compilation reports to ensure compliance with AASB standards, and performing tax reconciliation for a small business tax rate of 27.5%. This analysis will aid students in developing practical accounting skills and applying theoretical knowledge to real-world financial scenarios.

Running head: ACCOUNTING IN MYOB
Accounting in Myob
Name of the student
Name of the university
Author’s name
Table of Contents

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ACCOUNTING IN MYOB
PART 1: Self Reflection..................................................................................................................2
Part 3: Annual Report......................................................................................................................5
Part 4: Tax Reconciliation for Toy Market Pty. Ltd......................................................................11
References list:...............................................................................................................................13

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PART 1: Self Reflection
Professional accountants in business are at the frontline of safeguarding the financial
reporting integrity. I will be working as graduate accountant in public accounting firm. In
regarding this, I am required to discuss the role and responsibilities of such accountant in the
public practice and subtleties in dealing with issues of multiple clients. I will be doing literature
review for demonstrating several non-technical skills that is required by professional accountant
while dealing with clients. Accounting education is significantly influenced by non-technical
skills resulting from changes in business environment. I believe that for entry level graduates,
non-technical skills are considered important for competing and contributing in the current job
market.
It has been demonstrated from view point of employer as evident from various research
that gradate accountant are lacking non-technical skills that is required for being efficient in
workplace and gap exist between practice and education (Van der Merwe, 2013). As per my
belief, non-technical skills are applicable to all graduates while dealing with clients. Some of
non-technical skills that are required by accounting professionals when dealing with clients are:
Integrity-A professional accountant is required to be honest and straightforward in
performance of professional services. I think that integrity is considered to be an important trait
for accountants that extent of knowledge. An accountant is honest if he or she has high level of
integrity and professionals with high integrity is able to recognize that their main responsibility is
to provide quality services to their clients (Katz & Margo, 2014). If an accountant is not able to
serve their client, then they would not accept any client if they possess high integrity level.
Before accepting any clients, it is ensured by high level integrity accounting professional that

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they have through knowledge when dealing. I have able to extract evidence from doing some
secondary research such as published article that despite lack of certainty, high level integrity
accountant will seek to answer every question of their clients. Clients rely on
While working in public accountant firm as graduate, I would like to ensure that I am acting with
integrity when dealing with clients and they rely on me to get the things done and solving ethical
dilemmas of client relating to decision making.
Relationship building talent-An accountant is required to deal with clients on regular
basis and I think one of the persistent challenge faced by them is creating successful and positive
client relationship. One of most important part of accounting jobs while working in public firm is
that I have to possess abilities for creating positive client relationship. New graduates needs to
have ability to forge fruitful relationship and successfully cultivate clients that will help in career
advancements and business growth. I will be following some points in developing fruitful
relationship with clients while working in firm. First, I will try gain deep understanding and
knowledge of clients as it has been identified from recent survey that one of primary source of
dissatisfaction is lack of understanding of clients business. Therefore, I would understand
existing clients of firms. I will try to create complete clarity between both parties in regard to
service, delivery and scope. Successful relationship can be built on trust and all attempts would
be taken by me to add value to service. Proactive approach would be adopted by me and I will be
acting in client’s best interest.
Abilities to communicate-Accountants are required to demonstrate the story behind
numbers presented in the financial report. For the success of accounting role, both verbal and
written communication skills are considered essential. The human aspect of business
relationship is recognized by interpersonal communication. Personal finance can be sensitive to

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some clients in accounting. One of the factor that is of paramount importance in accounting
professional is that they should possess ability to relate people from different backgrounds while
maintaining professionalism. I will emphasize the importance of verbal and writing skills that is
regarded as one of the essential communication requirement.
Leadership abilities and Teamwork-Strong leadership qualities is considered essential
foraccountant professional and they should possess the ability of adapting to change, dealing
with multiple clients, conflict resolution, capability of embracing continuous learning and
mentoring their clients (Jackson, 2015). I will take every effort to oversee work of others and
delegating the tasks to various teams so that they are able to seamless provide solutions to their
respective clients. They need to be well acquainted with regulations and laws and should be
capable of providing training to new graduates.
Customer service orientation- Customer service orientation in accountant comes with
possessing of characteristics such asattentiveness, patience, knowledge about products, ability to
use positive knowledge, skills of time management, calming presence, goal oriented focus and
ability to read clients (Stone et al., 2013). While working in public firm, I would like to bring
changes in way of dealing with clients by inculcating all such skills in existing accountants.
Therefore, I can say in nutshell that an accountant should place equal importance to
acquiring non-technical skills as technical skills. As revealed from findings of several studies
that accountants well equipped with non-technical skills that helps in understanding dynamic of
groups, negotiation skills, creative skills and collaboration with business. Non-technical skills
helps in solving problems of clients relating to their decision making, ability of analyzing
reasons and conceptualizing logic, acting and thinking independently and critically. Employers
are now a days more concerned with employee’s non-technical skills and inculcation of such

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skills should be desired level of priority in accounting degree program development. Graduates
in accounting are still not well developed and they are required to get extensive training and
performing effectively in accounting profession. While analyzing literature and findings of
several study on accounting professionals skills, the factor that requires them to be alert on is
non-technical skills. In addition to have excellent academic achievement, they are required to
give priorities on development of non-technical skills. However, employers in accounting
profession expecting graduates to be well equipped with non-technical skills is somewhat
impractical. This is so because, such skills can be inculcated while dealing practical situations
and while working in organization.
Part 3: Annual Report
In the Books of Toy Market Pty. Ltd.
Income Statement
For the year ended 30th June, 2017
Particulars Amount
Revenue:
Toy Sales $431,517
Gaming Sales $237,390
Book Sales $128,673
Services Income $63,316
Total Revenue $860,896
Cost of Goods Sold:
COGS - Toys -$258,186
COGS - Games -$141,356
COGS - Books -$68,360
Total Cost of Goods Sold -$467,902
Gross Profit $392,994

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Opertating Expenses:
Accounting Fees -$5,752
Advertising -$17,953
Annual Leave Expenses -$6,840
Bad Debts Expense -$627
Bank Fees -$1,104
Credit Card Fees -$2,403
Depreciation Expenses -$12,933
Electricity -$8,512
Entertainmnt - Christmas Party -$517
General Expenses -$6,180
In-Store Promotions -$869
Insurance -$6,385
Lease Payments - Motor Vehicle -$4,455
Legal Expenses -$4,420
Motor Vehicle Expenses -$4,106
Opening Party & Lucky Prize -$2,500
Packaging and Wrapping -$5,216
Printing, Postage & Stationery -$8,764
Rent -$55,000
Repairs and Maintenance -$2,128
Salaries & Wages - Directors -$60,000
Salaries & Wages - Other Staff -$88,240
Staff Amenities -$894
Superannuation - Directors -$5,700
Super - Directors (Additional) -$6,000
Superannuation - Staff -$8,383
Sundry Expenses -$1,387
Telephone, Fax & Internet -$5,128
Workers Compensation -$311
Total Expenses -$332,707
Operating Profit $60,287
Finance Cost:
Interest Expense - S/H Loans -$13,725
Interest Income $191
Net Finance Cost -$13,534
Net Profit before Tax $46,753
Income Tax Expenses -$9,538

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Net Profit after Tax for the period $37,215
In the Books of Toy Market Pty. Ltd.
Statement of Changes of Equity
For the year ended 30th June, 2017
Particulars
Share
Capital
Retained
Earnings
Asset
Revaluation
Reserve
Total
Equity
Paid up Capital:
Elizabeth O'Neil- 40 shares x $1 $40 $40
Nicole Morris- 40 shares x $1 $40 $40
James Taylor - 20 shares x $1 $20 $20
Net Profit for the period $37,215 $37,215
Dividend paid -$12,500 -$12,500
Revaluation gain on investment $5,600 $5,600
Balance as on 30th June,2017 $100 $24,715 $5,600 $30,415
In the Books of Toy Market Pty. Ltd.
Balance Sheet
as on 30th June, 2017
Particulars Amount
Current Assets:
Cash at Bank $48,281
Petty Cash $200
Term Deposit $60,000
Trade Debtors $26,722
Less: Prov. For Doubtful Debts -$267
Income Tax Receivable $3,500
Inventory $193,649
Prepayments $5,000

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Accrued Income $191
Deferred Tax Assets $2,132
Total Current Assets $339,408
Non-Current Assets:
Leasehold Improvements $128,400
Accum Depr.- Leasehold Imprv -$2,937
Plant and Equipment $42,990
Accum. Depr.- Plant & Equip -$5,533
Leased Motor Vehicle $36,500
Accum.Depr. Leased Vehicle -$2,550
Computer Software $10,450
Accum. Depr Computer Software -$1,913
Shares in Listed Companies $34,400
Total Non-Current Assets $239,807
Total Assets $579,215
Liabilities:
Current Liabilities:
Trade Creditors $8,228
GST Payable $18,790
GST Receivable -$13,614
PAYG Withholding $9,340
PAYG Instalment $1,800
Provision for Annual Leave $6,840
Superannuation Payable $6,000
Loan - James Taylor $32,855
Loan - Elizabeth O'Neill $15,401
Loan - Nicole Morris $15,401
Deferred Tax Liability $6,170
Total Current Liabilities $107,211
Non-Current Liabilities:
Loan - James Taylor $251,051
Loan - Elizabeth O'Neill $77,019
Loan - Nicole Morris $77,019
MV - Lease Liability $36,500
Total Non-Current Liabilities $441,589
Total Liabilities $548,800

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Net Assets $30,415
Shareholder's Equity:
Share Capital $100
Retained Earnings $24,715
Asset Revaluation Reserve $5,600
Total Shareholder's Equity $30,415
Part 3:
Notes to financial statements:
1. Income
Recognition and measurement
Interest-A significant proportion of interest revenue is generated by the group from loans
and finance advances through finance services operations of company.
Revenue-Revenue is measured at fair value of consideration receivable or that is
received.
2. Expenses
Recognition and measurement-
Finance cost-Recognition of finance cost is done an expenses when they are incurred.
Payables and provision is discounted at rate when there is significance of time value of money.
Depreciation-Depreciation of assets are done on straight line basis based on useful lives.
3. Tax expenses- The measurement of current tax liabilities and assets is done at the
amount that is expected to be paid to taxation authorities and recovered from at the rate of

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tax that is enacted in the balance sheet. Reviewing of carrying amount of tax assets is
done at date of balance sheet
4. Cash and cash equivalent- Short term deposits and cash as depicted in balance sheet
comprise of cash in hand and cash at bank and other deposits that are classified as other
financial assets.
5. Receivables- Receivables of business are initially valued at fair value and consequently
using effective interest method at amortized cost by deducting allowance for impairment.
6. Property, plant and equipment- The carrying value of property, equipment and plant is
measured at asset cost by deducting any impairment and deductions. Amortization of
leasehold improvement is done over the anticipated useful life of assets or period of lease
whichever is shorter.
7. Earnings per share- The earning per share is calculated in accordance with standard
AASB 133. Calculation is done on net profit attributable to company by excluding the
equity servicing cost.
8. Operating segments- The operating segments of Toy market Pty ltd is managed and
organized separately in accordance with AASB 8 by categorizing the services and
products. Corporate is not regarded as operating segment and they are not allocated to
such segment.
Director’s declaration:
It is stated in accordance with the declaration of board of director of Toy Pty limited that:
 In the opinion of directors, notes to financial statement and additional disclosures
made in the report for financial year ending 30th June, 2017 is designated as audited
and is prepared in accordance with Corporation Act, 2001.

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 It is believed by organization on reasonable ground that they are capable of paying
debt as they become payable and due.
 The declarations have been made to directors for financial year 30th June, 2016 in
accordance with section 295A of Corporations Act, 2001.
Accountant’s compilation report-
The compilation of financial report of Toy Pty Limited is done in accordance with
AASB. I have compiled the financial statement identification including the period and entity
name. Fair representation and preparation of financial statement is the responsibility of
management. I have not provided any assurance and have not expressed any opinion whether
the financial statements are in accordance with accounting basis as prescribed by standard.
As an accountant, my responsibility is to conduct the compilation of report is accordance
with review services and statements on standards for accounting.
Part 4: Tax Reconciliation for Toy Market Pty. Ltd.
Particulars Amount Amount
Accounting Profit $46,753
Add:
Annual Leave Expense $6,840
Bad Debts Expense $627
Depreciation under Accounting Base $12,933
Rent $55,000
Sundry Expenses $1,387 $76,787
$123,540
Less:
Actual Bad Debt $360
Actual Rent Paid $60,000
Depreciation under Taxation Purpose $28,498 $88,858