TACC102 – ACCOUNTING FOR DECISION MAKING

⦁ Prepare Cash Flow Statements and critically analyze the statements.
⦁ Demonstrate an understanding of accounting for different forms of enterprises, such as companies and partnerships.
⦁ Apply knowledge to recognize, identify, measure, and evaluate liability and equity.
⦁ Understand the Management Accounting, And critically evaluate the cost and production volume information.
⦁ Understand Excel functions and conduct financial statement analysis with modern technology.

Question 1: Cash Flow Statement and Report to Management

The management of Locale Ltd is worried because the bank overdraft has increased by a substantial amount over the financial year ended 30 June 2021 despite a large profit and the introduction of additional capital. The internal comparative statements of financial position on 30 June 2020 and 2021 were as follows. (24 marks in total, 1 mark for each cell)

Additional information
    1. The land was revalued upwards during the year by $22 500.
    2. During the year, a dividend of $33 750 had been paid.
    3. Plant and equipment which had originally cost $82 500 and had been depreciated by $15 000 was sold during the year for $71 250.
   4. The company pays income tax in four installments and the first three installments have been paid. For the year ended 30 June 2020, the ATO issued an amended assessment of $12 750 resulting in an under the provision of $3750 being recorded in 2021..

Required
    (a) Prepare a statement of cash flows as per current accounting standards using the direct method.
    (b) Prepare a note reconciling cash flows from operating activities to profit.

Question 2: Match Ltd and Box Ltd both began operations on 1 January 2020. For illustrative purposes, assume that at that date their statement of financial positions was identical and that their operations during 2020 were also identical. The only difference between the two companies is that they elected to use different accounting methods as can be seen below. (14 marks in total, 1 mark for each box)