ACC210 Assignment Session 2014 60 Due date: Sunday September 14th, 2014 (midn

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ACC210 Assignment Session 2014 60 Due date: Sunday September 14th, 2014 (midnight) Value: This Assignment is worth 30% of the overall assessment in this subject. The Assignment is marked out of 100. IMPORTANT: PLEASE ENSURE YOU READ AND UNDERSTAND THE ASSIGNMENT PREPARATION AND SUBMISSION REQUIREMENTS Rationale This assignment directly addresses some of the key learning outcomes for ACC210 including that on successful completion of the subject students will: • be able to demonstrate technical, computational, and analytical skills associated with the design and operation of product costing and accounting control systems; • be able to discuss issues associated with contemporary performance measurement; • be able to use computer spreadsheets as an aid to product costing, budgeting and performance evaluation; and • be able to communicate effectively in designing reports for management;. The requirements of this assignment cover up to and including Module 7 of the Online Learning materials. The assignment is designed to develop your problem solving, spreadsheet (Excel) design, and written communication skills. The questions require you to apply the knowledge and tools covered in the subject topics in order to demonstrate your understanding of the subject content and also to illustrate your capacity for strategic thinking. The assignment will also test your ability to communicate and explain the impacts of your findings whether through quantitative or written reports. The ability to communicate effectively has been identified by the accounting professional bodies as being critical to your future role as an accountant. Note: The development and demonstration of a level of technical proficiency in using spreadsheets to prepare management accounting reports is a key requirement and expectation of this subject and, more particularly, of this assessment. In prior offerings of this subject some students have resisted or not fully engaged with this requirement to effectively use Excel or some compatible spreadsheet application and have received significantly reduced marks. Several short video tutorials on Excel will be provided through the subject interact site. These include a tutorial specific to this subject and several that were prepared for introductory accounting subjects. Indicative examples of the types of formulae needed and model formats will also be provided, however you are required to develop your own spreadsheets. If you need further help with developing your Excel skills you should contact your lecturer or subject coordinator who will be able to direct you to other resources to assist your learning. Assessment Criteria You will be assessed on the following marking criteria: ability to identify accounting problem(s) or issue(s) and apply the appropriate accounting technique; ability to use Excel to solve management accounting problems. This includes the ability to use appropriate Excel (or similar) analysis tools and functions, construct appropriate spreadsheet formulae and to effectively and appropriately print and present your material and results; level of technical proficiency in using spreadsheets to prepare management accounting reports; ability to correctly interpret the results of your analyses and to clearly convey your understanding of the results to the end user; demonstrated ability to apply your knowledge of management accounting business situations in a strategic manner; demonstrated understanding of the theoretical issues underpinning management accounting; and ability to present your answers effectively, appropriately, and neatly, using computers. You must submit workings showing how you have obtained your answers, including whether you have applied appropriate techniques to analyse and solve problems. Indicative examples of the types of Excel formulae needed and model formats will also be provided, however you are required to develop your own spreadsheets. Marking Rubric – ACC210 2014 30 Assignment Learning outcome Marking Criteria High Distinction Distinction Credit Pass Fail be able to demonstrate technical, computational, and analytical skills associated with the design and operation of product costing and accounting control systems ability to identify accounting problem(s) or issue(s) and apply the appropriate accounting technique Apply appropriate accounting technique to identified issue with no quantitative errors and excellent presentation and formatting Identify type of accounting problem and apply appropriate accounting technique with very few (if any) errors and good presentation and formatting Identify type of accounting problem and apply appropriate accounting technique with few minor errors Identify type of accounting problem and apply appropriate accounting technique with some calculation errors Fail to correctly identify the accounting issue and fail to apply the appropriate accounting technique to solve the problem. Numerous and/or catastrophic calculation errors. be able to discuss issues associated with contemporary performance measurement; be able to communicate effectively in designing reports for management; ability to correctly interpret the results of your analyses and to clearly convey your understanding of the results to the end user demonstrated ability to apply your knowledge of management accounting business situations in a strategic manner; demonstrated understanding of the theoretical issues underpinning management accounting. References and sources acknowledged and professionally presented ability to present your answers effectively, appropriately, and neatly, using computers. Correctly identify underlying accounting issue and all of the potential implications of accounting data/ results. Identify key areas of concern for management adopting a strategic ‘whole of business’ approach including well thought out and justified recommendations. Output is well researched, logically argued, and well written in a manner that very effectively conveys the key outcomes and recommendations to the end user. All references and sources acknowledged and professionally presented. Correctly identify underlying accounting issue and all of the potential implications of accounting data/results and identify and report key areas of concern for with effective strategic recommendations for management. Well researched and well written argument with references and sources acknowledged and output professionally presented Correctly identify underlying accounting issue and major implications of accounting data/results and identify and report key areas of concern for management in a concise manner. Well written with a logical argument and with references and sources acknowledged and professionally presented Identify underlying accounting issue and some implications of the reported accounting data/results and report issues that should be of concern to firm management. Written in clear language with references and sources acknowledged and professionally presented Fail to identify underlying accounting issue. Incapacity to interpret the results of quantitative problem analysis in a manner that adds value to the accounting data/results developed for management be able to use computer spreadsheets as an aid to product costing, budgeting and performance evaluation; level of technical proficiency in using spreadsheets to prepare management accounting reports; ability to use Excel to solve management accounting problems. This includes the ability to use appropriate Excel (or similar) analysis tools and functions, construct appropriate spreadsheet formulae and to effectively and appropriately print and present your material and results; ability to present your answers effectively, appropriately, and neatly, using computers. Use of appropriate formulae with no errors. Correct use of data input sections where appropriate. Excellent design allowing intuitive and easy comprehension of key data. High standard of formatting enhancing the logical presentation of the data output enhancing comprehension by report end users Consistent use of appropriate formulae with very few (if any) minor errors. Correct use of data input sections where appropriate. Well designed and logical data output presentation. Good formatting allowing easy and effective comprehension by report end users Consistent use of appropriate formulae with few errors. Correct use of data input sections where appropriate. Logical data output presentation and formatting allowing easy and effective comprehension by report end users Use of appropriate formulae with some errors. Use of data input sections where appropriate. Basic data output presentation and formatting allowing effective comprehension by report end users Fail to use appropriate Excel formulae to construct spreadsheet solutions to accounting problems including data input sections and advanced formulae. Poorly formatted and presented. Preparation and submission requirements This assignment requires a Microsoft Word document as well as a Microsoft Excel spreadsheet solution and both of these must be submitted online using EASTS. 1. You must submit both a Word file AND an Excel file. Failure to submit both of the files by the due date constitutes non-submission and late penalties will apply. 2. Your spreadsheet solutions must be cut and pasted into the Word document. This Word document is what will be marked and returned to you. Remember that in the business world the professional presentation of information is fundamental and accordingly marks will be deducted for poor presentation. An electronic version of your source spreadsheet is required to enable markers to open the file and test your efficient use of spreadsheet formula by, for example, changing values of input variables. Marks will be awarded on the basis of correctness of answers, appropriate use of spreadsheet modelling, effective worksheet design, and level of professional presentation. 3. A reference list is mandatory for this assessment item. It is important that you are aware of how to reference properly and a reference list must be provided, properly formatted using hanging indent. Please note that it is a submission requirement that you include a reference list and assignments which do not include a properly formatted reference list will incur up to a 5 mark penalty. Review the rules regarding plagiarism and if you are not sure contact your lecturer or student learning skills advisor for advice. There is no excuse for presenting the work of others as your own; this includes cutting and pasting material from the web without properly referencing the source. In this subject there has historically been large numbers of students caught either plagiarising or failing to reference properly. The CSU Library site provides an on-line guide to APA style referencing. This is the referencing style adopted by the School of Accounting and Finance. The guide can be downloaded as a PDF under the Research and Teaching tab on the library home page (http://www.csu.edu.au/division/studserv/my-studies/learning/pdfs/apa.pdf). Any difficulties in submitting your assignments online electronically using EASTS should be immediately reported to the Subject Coordinator by email. Include your name and student number in the header or footer of all documents submitted. Retain a copy of your assignment for your records. Spreadsheet requirements Your spreadsheet must have a separate worksheet (tab) for each question answered. For each question the worksheet should have a data entry section where all (or most) of the question data is entered, followed by a model or results section. The results section should be mainly formula driven. NB There should be as little as possible data entry in the model/results section of the spreadsheet. Most, if not all, data should be imported into the model from the data entry section. A number of Excel resources will be provided through the subject Interact site to assist you complete this assignment however there is no substitute for getting in and trying it out. An excel resource file specific to the assignment is provided on the subject Interact site and you should review the various formulae demonstrated on that file. Please contact your subject coordinator if you need further guidance on particular issues surrounding Excel. Assignment Background: To provide workplace context to this assignment you are to assume that you have been appointed to a graduate management accounting position within a hypothetical company, Jupiter Australia. Jupiter is an extremely successful multinational company. In Australia and New Zealand Jupiter manufacture a range of Fast Moving Consumer Goods (FMCGs) including several well known pet food brands, confectionery brands, and consumer food brands. You have been appointed to a Management Accounting role within Jupiter Australia commencing in their Wodonga pet food factory. As part of your role you will be expected to provide advice to management and production teams around strategic and operational issues across a number of Jupiter divisions. At the commencement of each question you are referred to the Topic Modules which cover the material in the question. Question 1 Manufacturing Cost Schedule and Income Statement (10 marks). This question relates to learning material and objectives from Online Modules 1, 2 and 3. Puss in Boots Pet Food is a wholly owned subsidiary of Jupiter Australia and New Zealand and utilises a traditional manufacturing cost flow inventory and accounting system. Puss in Boots Pet Food is incorporated and operates in Australia, and pays tax at the Australian corporate rate of 30%. Trading data for Puss in Boots Pet Food for the 2014 financial year was as follows and there are no adjustments for accruals or prepayments: Account: $ Purchases of Raw Materials & Packaging 4,628,000 Factory Overhead 1,422,000 Heat Light & Power Costs (Factory) 1,756,000 Heat Light & Power Costs (Admin) 226000 Depreciation of Factory Plant, Equipment & Machinery 1,000,000 Depreciation of Office Equipment & Furniture 38,000 Office Salaries and Costs 76,000 Factory Direct Labour Cost 1,728,000 Factory Indirect Labour Cost 303,000 Interest & other charges 900,000 Sales Revenue 22,101,000 Freight Outwards 172,000 Freight Inwards 55,000 Sales & Marketing Expenses 2,385,000 Accounting & Audit costs 426,000 On June 30th 2014 selected account balances of Puss in Boots Pet Food were as follows (with comparative 1/7/2013 Opening Balance figures): Account: Jul 1, 2013 Jun 30, 2014 Work in Process (WIP) Inventory: Opening Closing Raw Materials 352,000 302,000 Direct Labour 39,000 35,000 Manufacturing Overhead 96,000 86,000 Jul 1, 2013 Jun 30, 2014 Raw Material Inventory 156,000 178,000 Finished Goods Inventory 942,000 1,107,000 Required: Using Excel, prepare a Schedule of Cost of Goods Manufactured, Schedule of Cost of Goods Sold, and an income statement for Puss in Boots Pet Food from the information provided. (10 marks) Note: Your Excel model should include a data input section and appropriate formulae. An example of Manufacturing Cost Schedules can be found in the Langfield-Smith text on p.58 and an Excel example is available in Resources on the subject Interact site. Question 2 Strategic Management Accounting Case Study (20 marks) This question builds on prior studies of Cost Volume Profit (CVP) analysis and relates to learning material and objectives from Online Modules 1 and 2. (For assistance on how to answer this question you are advised to undertake the case study from Mars Petcare which is provided online in Module 2 as the Topic Reflection Task). ‘Friend’ Dog Food STRATEGIC MARKET ANALYSIS You have joined the cross-discipline Strategic Management Committee of Jupiter Australia as the management accounting representative. The key issue facing this top level management committee at the moment is how to improve profitability in several key product categories across several divisions. The product currently under discussion is the ‘Friend’ line of wet dog food sold by Jupiter through the major supermarket chains in Australia and New Zealand. The ‘Friend’ product has been a market leader for Jupiter Pet Food however lately it has come under increased price competition and the sales and market share of ‘Friend’ canned dog food have fallen dramatically. The ‘Friend’ product is marketed as a premium product for large dogs and is priced at a premium to reflect its quality. The major competition comes from a similar product manufactured by a multinational rival branded as ‘Buddy’ which is also marketed as a premium product, but which sells at a discount to our product the market leader ‘Friend’. The Marketing Department for the Jupiter Dog Food Division has provided the following information about the canned dog food market during the 2014 financial year. The total sales of canned dog food in the Australia and New Zealand market for 2014 was 720 million individual units of which ‘Friend’ held 45% and ‘Buddy’ held 25%: The Marketing Department advises you that at the end of the previous 2013 financial year ‘Friend’s’ market share had been 55% and the ‘Buddy’ brand held only 15%. Since that time ‘Buddy’ dog food has been advertising heavily and aggressively pricing their product in the market, increasing their market share to the current level of 25%. The Strategic Management Committee agrees with the marketing department that this sales trend is damaging and is impacting on the profitability of Jupiter’s marquee pet food brand ‘Friend’. Currently the Return on Total Assets (ROTA) for Friend dog food has fallen to 24.92% (calculated by dividing Gross Profit by Total Assets). This is marginally below the required ROTA of Jupiter which is 25%. If the product continues to lose market share it may not be viable. As the Management Accounting representative you have provided the Strategic Management Committee with the following breakdown of revenues and costs for the ‘Friend’ product line for the just completed 2014 financial year: Friend Dog Food Total Assets ‘Friend’ Factory $65m Total Sales (Volume in Units) 324m Regular Retail Price (per unit retail price) $2.99 Gross Sales Value Received (per unit wholesale price) $2.35 Supermarket Rebates (per unit) $0.15 Net Sales Value Received (per unit) $2.20 Prime Costs (per unit) $0.55 Other Manufacturing Costs (per unit) $1.00 Logistic Costs (per unit) $0.60 Gross $ Margin (Gross Profit) (per unit) $0.05 Total $ Margin (Gross Profit) $16.2m % Return on Total Assets (ROTA) 24.92% The Marketing Department has carried out research into the wet dog food market which indicates that by discounting the recommended retail price of ‘Friend’ by $0.24 per unit to $2.75 per unit*, unit sales of ‘Friend’ will increase by 15%. In an attempt to simultaneously lower ‘Friend’ product costs the research and development (R&D) team have identified that by slightly altering the meat and cereal ingredients quality and mix a saving of 15% of prime costs can be made. However, the Chair of the Strategic Management Committee advises that even after allowing for the 15% savings in prime costs, discounting the product by $0.24 per unit will mean that the product will no longer achieve the firm’s long term required return on total assets (ROTA) of 25%,. The CEO argues that if this remains the case, the previously successful ‘Friend’ product line may have to be discontinued. You advise the Committee that you are aware that the ‘Friend’ manufacturing facility in Wodonga is currently running at 71% of its practical capacity and that the warehouse facility (logistics) is running at 68% capacity. You are also aware that whilst the ‘Friend’ product’s Prime Costs are 100% Variable, other Manufacturing Costs and Logistic Costs are made up of 75% Fixed costs and 25% Variable costs. It can be assumed that this cost break-down between variable and fixed costs will hold consistently across the industry (including for competitor Buddy). Assume that 80% of the predicted ‘Friend’ unit sales increase will be made at the expense of the unit sales of their main competitor ‘Buddy’ meaning ‘Buddy’ sales will fall by 80% of the ‘Friends’ sales increase. Finally, assume that ‘Friend’ and ‘Buddy’ have identical cost structures at the commencement of the 2015 financial year, prior to the recommended changes. You ask if you can be given time to prepare a report for the Strategic Management Committee on the Management Accounting cost and profit implications of the changes proposed by Marketing and R&D based on the budgeted costs and increases in sales and production. *Remember that the manufacturer does not receive the retail price. The discounted wholesale price will be $2.11 per unit, down from $2.35 per unit. Required: (i) Using excel prepare a ‘before and after’ budget comparative analysis of the revenues and costs of the ‘Friend’ product line. The analysis should incorporate the $0.24 cent drop in price, the 15% predicted savings in prime costs, and include the 15% predicted sales increase. Ensure you include in your analysis any impact of the budgeted production increase on other per unit manufacturing and logistics costs. (10 marks) (ii) Prepare a brief report (approx. 300 words) for the Strategic Management Committee outlining the key points of your findings. Include some discussion on: a. the likely impact of the changes on the cost and profit structure of Friend Dog Food Division (derived from your answer to (i)). b. Calculate and discuss the likely impact of the changes on the cost structure of our main competitor Buddy Dog Food (use Excel). c. Make a recommendation to the Committee on whether to go ahead with the planned changes. Include any other strategic advice that you consider relevant to the Committee’s decision making. (Please ensure that your answer adequately addresses ALL of the points above) (10 marks) Question 3 Comprehensive Manufacturing Budget (30 marks) This question builds on prior studies and relates to learning material and objectives from Online Modules 1, 2 and 3. Links to specific resources provided for this question relating to Manufacturing Budgets and Excel spreadsheets can be found in the Online Topic Modules. You have been asked to prepare a 5 year budget forecast for the ‘Giggles’ Chocolate and Nut Nougat Energy Bar factory. The ‘Giggles’ division of the Neptune Australia company utilises a traditional manufacturing cost flow inventory and accounting system. As at June 30th 2014 the following financial and trading data was provided: 2014 Year data (all costs are per unit) Sales (Units) 102.36 million Price (average 2014 price received) $0.956 Prime Costs (per unit) Ingredients (including chocolate and nuts) $0.1950 Direct Labour $0.0250 Variable OH Manufacturing Costs (per unit) $0.3400 Factory Management Salaries (per annum) $725,000 Factory Plant & Equipment Depreciation (per annum) $500,000 Sales and Marketing Costs (per annum) $5,186,000 Finance Costs (per annum) $1,465,500 Non-Factory Administration Costs (per annum) $764,000 Inventory on Hand (at valuation): Ingredients & Packaging (2,001,500 units) $410,000 Finished Goods (2,020,500 units) $1,150,000 ‘Giggles’ maintains a target safety stock of raw materials inventory and finished goods inventory amounting to the equivalent of one (1) week of the current year’s budgeted unit sales. At the end of the 2014 financial year there were 2,020,500 completed units of ‘Giggles’ chocolate bars in the warehouse as Finished Goods. There was enough raw materials on hand to manufacture 2,001,500 units of ‘Giggles’ chocolate bars. Management at ‘Giggles’ predict that unit sales of the company’s chocolate bar will continue to grow indefinitely at a rate of 4% above the 2.25% current long term rate of inflation (budgeted 6.25% increase per annum). The company is budgeting to achieve a year on year price increase of 1% over the long term inflation rate (3.25% annual increase). Factory Depreciation expense is straight line at $500,000. All other costs including direct labour and ingredient costs are expected to increase annually at the rate of inflation. The company pays tax at the Australian Corporate tax rate which is expected to hold at 30%. The inflation rate of 2.25% is expected to hold over the 5 year budget period. The ‘Giggles’ factory has been operating at its current site in Ballarat, Victoria since the late 1970s, however due to the consistent growth in sales of the ‘Giggles’ chocolate bar, the factory is nearing its practical manufacturing capacity of 110 million chocolate bars per annum. Required: (i) Using Excel develop a Sales, Production and Purchase budget as well as a budgeted Schedule of Cost of Goods Manufactured, Schedule of Cost of Goods Sold, and an Income Statement for each of the 5 years in the budget period (commencing 2014) (advice on the form of these budgets is linked through the online topic modules and in the Interact Resources folder and is also available in the Appendix to Chapter 9 of the text book). This budget must also take into account the manufacturing facility practical capacity production constraint. Your spreadsheet must include a data section which enables inputs (such as the inflation rate, budgeted cost and sales increases, and the production limit) to be simply altered and ‘what if’ analysis to be undertaken. (Excel resources are provided on your Interact site to guide students on the use of the ‘IF’ formula which can be used for the budget production constraint). (15 marks) Hint: All 5 years of each budget should be shown side by side (1 column per year) for ease of comparison by management. All of the budgets should be presented on one worksheet together, working down the page commencing with the Sales and then Production budgets. You should be able to drag the formula across for the whole of the budget if the first years are properly constructed with a data input section and using absolute referencing. This makes the process much quicker and easier. An Excel help file and video which deals with the formula required has been placed in the Resources folder in the subject Interact site to assist students (linked through Online Module 3). (ii) The CEO of ‘Giggles’ is aware of the impending production problems caused by the 110 million unit practical manufacturing capacity of the factory. The CEO faces the option of trying to limit costs and maximise profit within the current manufacturing and sale constraint or invest in new plant to expand the capacity of the factory. An investment in new plant will cost $12 million in new plant and increase the current manufacturing capacity by 20%. It will have no impact on any variable costs or on other manufacturing costs. It is expected that this new factory plant would be depreciated straight line to zero over 20 years. The planned upgrade can be completed and ready for operation by the commencement of the 2016 financial year. Using the excel model developed in part (i) calculate the impact on sales and profit if the option of upgrading the manufacturing facility is exercised and the practical production capacity of the factory is increased by 25% (Include the additional factory depreciation expense. Submit results as a separate worksheet). (5 marks) (iii) Given your findings from part (i) and (ii) write a report for the CEO of ‘Giggles’ recommending whether to take up the option to upgrade the production facility. In your report consider all of the strategic and financial implications to the firm of reaching its production constraint and any implications or opportunities arising from upgrading the facility and having extra productive capacity. Your grade will depend on the accuracy and depth of your analysis, and your capacity to identify strategic issues which management should consider when making their decision (approx. 300 words). (10 marks) Question 4 Process Costing (10 marks) This question relates to learning material and objectives from Online Module 5. The Jupiter Australia factory in Albury Wodonga responsible for manufacturing high end cat food products for export into the Japanese market operates continuously 24 hours a day, 7 days a week. The factory employs a process costing system. As a management accountant for the Pet Food Division of Jupiter Australia you are required to produce end of period product costing for a range of different product lines including the ‘Sashimi’ export cat food trays. The ‘Sashimi’ product is a blend of sea food and cereal which is mixed and then cooked in a sealed aluminium tray. The process for manufacturing ‘Sashimi’ is to first mix all of the ingredients. The mixed ingredients are then sealed in the aluminium tray and pressure cooked. It is assumed for Process Costing purposes that all Raw Material ingredients and packaging are added at the commencement of the process. For the purpose of accounting, the conversion costs of manufacturing are assumed to occur evenly across the whole of the production cycle which takes several hours. The following information relates to the production of ‘Sashimi’ during the month of June 2014. Work-in-Process: June 1, 2014 35,286 Units Stage of completion Value Raw materials 100% $18,750 Conversion 65% $17,200 Work-in-Process: June 30, 2014 87,540 Units 30% Complete A total of 2,926,100 individual trays of Sashimi cat food were completed during June and the following costs were incurred. Costs incurred during June 2014: Raw materials $1,554,500 Conversion $2,243,100 Required: (i) Using the Weighted Average Cost Method determine the cost value of closing WIP and the cost value of goods transferred out during the period. (5 marks) (ii) Using the First In First Out (FIFO) method determine the cost value of closing WIP and the cost value of goods transferred out during the period. (5 marks) Question 5 Activity Based Costing (ABC) (15 marks) This question relates to learning material and objectives from Online Module 6. Banzai is a range of aluminium foil tray premium dog food products manufactured for export to Japan from one of several pet food factories based at Jupiter Australia’s head office location in Wodonga, Victoria. Banzai manufactures a Standard range of products and an Advanced range. The Advanced range uses slightly more expensive ingredients and involves the process of adding a small premium food display item to the top of each individual tray of pet food. The Advanced product sells in much smaller numbers than the Standard product and consequently has smaller batch runs when processing. The Standard model wholesales for AUD $1.50 whilst the Advanced product model sells for AUD $2.5. Currently the cheaper Standard product outsells the more expensive Advanced product at a rate of 10 to 1. The Banzai factory uses a normal costing approach to allocate overhead costs to products. The cost driver used is machine hours which recognises the amount of machine time expended in the manufacture of each unit. The Managing Director of the Banzai product line has reviewed the comparative margins earned on the two products using the following data: 2015 Sales and Cost estimates Standard Product Advanced Product Forecast Sales (Units) 12,000,000 120,000 Selling price per unit($) $1.50 $2.50 Prime Costs per unit $0.50 $0.80 Machine Hours per 1,000 Units 1 1 The firm has always applied overhead to product costs based on Machine Hours as the factory-wide cost driver. For 2015 it is expected that OH will be applied to each product at the rate of $500 per machine hour (1 machine hour per 1,000 units). The Managing Director and Marketing Manager believe that the Gross Profit on sales of the Advanced product are achieved at a higher margin than the Standard product and therefore more focus should be placed on manufacturing and selling the Advanced product. Whilst the Standard Bonzai product is superior to others on the market it has been slowly losing market share to slightly cheaper competitors. Because of its perceived lower margin the company does not believe that it is sustainable to discount the Standard product to meet competitors. The Marketing Manager believes it is time for the firm to focus on the more profitable niche market for the Advanced product. Whilst you are relatively ne

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Assessment 2 Assessment Type:       Research Exercise 2 – research and 1500

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Assessment 2 Assessment Type:       Research Exercise 2 – research and 1500 + 10% word report – individual assessment Purpose:          In this assessment, students should use the feedback from the first assessment to             improve and further develop their research, analysis and report writing skills,   applying these to the topic of planning implementation issues. This assessment     relates to Learning Outcomes a, b, c and d. Value:  35% Due Date:       Week 8. – 12.00 pm SUNDAY, 14 SEPTEMBER, 2014 Submission:    Upload an electronic copy – Word .doc or .docx – to Moodle and Turnitin Topic:  Control Issues Task Details:   Students are to analyse the control model on p 278 of the text (hard copy) , Schermerhorn  and compare and contrast what the authors say about the control process with at least 3 other theorists (refer to Recommended Reading list). Students should draw some conclusions as to the viability of this design in modern organisations, identifying specific examples where possible to illustrate their findings/conclusions. They are to present their analysis and findings/ conclusions in a professionally presented short report of  1500 + 10% words. It is important that students use the feedback given in their first assessment to improve their research, analysis and report writing skills. Research requirements: Students must use the text and a minimum of three academic journal articles. Additional sources may be used but should be academically acceptable. Presentation:  1500 + 10% word short report – Word .doc or .docx – the title page, executive summary, table of contents and reference list are not included in the word count. Title page, executive summary, table of contents, suitable headings and subheadings, conclusions, in-text referencing and reference list (Harvard – Anglia style). Typed using 12 pt Times New Roman or 11 pt Calibri fonts. Single line spacing Marking Guide:          Analysis          20% Research – extent and application           20% Findings/conclusions 20% Presentation   20%

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1 MAA 705 Auditing, T2 2014 Assessment 3: Group case analysis (15 marks) Due d

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1 MAA 705 Auditing, T2 2014 Assessment 3: Group case analysis (15 marks) Due date: Week 8, Monday 8 September 2014 before 11.59 pm. Late submissions may be accepted only if the student has requested extension of submission date and the unit chair approved the request. Submission: Submit only online via CloudDeakin. Word limit: 1.500 (including references) Weight: This assignment is worth 15% of your final grade. Assessment Instruction: Group of maximum 3 students have to prepare a memorandum. Tasks are detailed in the case study. 2 Beer Brewing Ltd. (BBL) Introduction In March 2013, Curt Connors, an audit partner at XYZ Chartered Accountants (XYZ), has received an offer to participate in a tender for a potential audit client, Beer Brewing Ltd (BBL). XYZ is a medium sized auditing firm established in 2002 by three members of the Chartered Accountants Australia and New Zealand. XYZ has so far been dealing with small firms as audit clients. Following the firm’s growth over the past few years, the partners decided to bid for ASX-listed company audits. In making any client acceptance or continuance decision, XYZ undertakes evaluation of the (potential) client and assesses the XYZ’s independence and competence to properly complete the audit.  BBL is an ASX listed company whose shares have been publicly traded over the past five years. In a routine independence assessment that is conducted as part of considering any new client, XYZ partners declared that they have no personal or business relationships with BBL. They also declared that their close family members neither hold BBL’s shares nor have any business relationships with the company. However, Otto Octavius, one of the audit managers at XYZ declared that he owns BBL’s shares with a current market value of $23,000. BBL is a beer manufacturer company, but XYZ did not conduct any audit of beer breweries earlier. However, XYZ has been conducting audits of manufacturing firms producing other types of drinks. BBL’s background BBL is a medium sized beer manufacturer based in regional New South Wales. The company was established as a family business in 1989 and has since grew in size. BBL has been operating as an ASX listed company since July 2008. BBL’s organizational structure shows that the company has board of directors with eleven members. Stephen Strange chairs the board and the 3 board has an audit committee with three members. BBL also has an internal audit unit reporting to Stephen. The company operates with seven divisions, namely, Manufacturing, Warehouse, Sales, Shipping, Purchases, and Finance & Administration. BBL conducts sales to wholesale traders and retailers through its sales division. The Purchases division buys raw materials for the factory. BBL purchases most of the malted barley used in the manufacture of beer from Barleyfarm Ltd, which is wholly-owned by Stephen’s cousin. All the other materials needed for production are purchased from other suppliers in the market. Year 2013 audit of BBL Curt attended a meeting with Stephen on 15 March 2013 to discuss a possible audit engagement. Stephen explained to Curt that there was a disagreement with the previous auditor (in the 2012 audit), but he also assured Curt that this disagreement was not the reason for the change of auditor. Matt & Associates (M&A) audited BBL for the previous three years. M&A has merged with another mid-tier auditing firm and abandoned its manufacturing clients because it planned to specialize in the real estate audit market. Nonetheless, M&A had major disagreements with BBL’s top management and the board of directors regarding last year’s audit. The disagreement arose because M&A modified the auditor’s report on account of two reasons. First, M&A auditors recommended increasing the allowance for doubtful debts, which Stephen and BBL’s board of directors refused by arguing that BBL has strengthened its collection effort and thus they were optimistic about the recoverability of most of the receivables. Second, some brands of beer that BBL had in stock were assessed by the auditor as having lower value than reported on the balance sheet. While market competition over the past few years made the sales prospect of this inventory doubtful, the board and top management insisted that no loss be recorded in this area. Curt requested permission to contact M&A before making a decision to accept BBL as a client. Initially, Stephen was not happy about this request 4 but was finally convinced by Curt’s explanation of the purpose and importance of this communication for a proper audit of BBL‘s 2013 financial statements. Subsequently, Curt held a meeting with Matt Murdock, an audit partner at M&A, who explained to Curt why they resigned as auditors of BBL. The information that Matt disclosed to Curt was consistent with the information received from Stephen. Matt also explained that they don’t have any concerns regarding the integrity of BBL’s top management. Financials Curt conducted preliminary analytical review based on BBL’s financial information presented below. 5 Exhibit 1: Statement of Financial position Beer Brewing Ltd Statement of financial position At 30 June 2013  2013* ($’000) (Unaudited) 2012 ($’000) 2011 ($’000) Current Assets    Cash 5,600 5,040 6,345 Inventory 16,912 11,230 9,233 Trade Receivables 15,175 13,350 12,421 Total current assets 37,687 29,620 27,999 Non-current assets    Property, plant and equipment 19,606 18,120 13,470 Long-term receivable 3,420 4,569 5,450 Total non-current assets 23,026 22,689 18,920 Total assets 60,713 52,309 46,919 Current Liabilities    Trade Payables 5,653 4,650 5,421 Provisions 8,450 6,521 5,070 Total current liabilities 14,103 11,171 10,491 Non-current liabilities    Long-term loan payable 6,711 5,085 4,084 Total liabilities 20,814 16,256 14,575 Net assets 39,899 36,053 32,344 Shareholder’s equity    Share capital 7,657 2,300 2,300 Retained earnings 32,242 33,753 30,044 Total Shareholders’ equity 39,899 36,053 32,344 6 Beer Brewing Ltd Income Statement For the Year ended 30 June 2013*  2013  $’000 (Unaudited) 2012 $’000 2011 $’000 Sales 112,330 120,839 135,073 Cost of sales 80,321 85,919 87,930 Gross profit 32,009 34,920 47,143     Depreciation Expense 8,422 6,521 4,209 Inventory obsolescence 2,484 3,531 2,166 Marketing expense 2,025 2,980 3,835 Administrative expense 13,434 13,136 17,334 Interest expense 1,565 1,919 1,716 Total expense 27,930 28,088 29,261     Profit before tax 4,079 6,832 17,882 Tax expense 1,428 2,391 6,259 Profit after tax 2,651 4,441 11,624 * The audit team obtained financial information for the year ended 30 June 2013 in July 2013. Financials for the years 2012 and 2011 were obtained during the tender. Curt calculated key financial ratios for BBL and collected corresponding industry average ratios, presented on Exhibit 2. Exhibit 2: Financial ratios Key financial ratios Beer Brewing Ltd Industry Averages  2013 2012 2011 2013 2012 2011 Current ratio 2.67 2.65 2.67 2.01 2.03 2.11 Quick ratio 1.47 1.65 1.79 1.15 1.01 1.1 Debt to equity ratio 0.52 0.45 0.45 0.85 0.78 0.76 Times interest earned 3.61 4.56 11.42 4.00 5.00 6 Average Collection period (days) 49.31 40.32 33.56 45.00 35.00 32 Accounts Payable (Days) 25.69 19.75 22.50 30.00 22.00 22 Gross profit Margin (%) 28 29 35 24.00 25.00 30 Net profit Margin (%) 2 4 9 6 7.5 9.2 7 Required: Assuming that your group is the team of auditors assigned in this engagement, write a memo to Curt Connors to: a) Explain whether this client should be accepted; b) Discuss risk factors present in this audit engagement and determine major transaction cycles and/or accounts that warrant increased audit effort; c) Make an assessment of the RMM (risk of material misstatement); and d) Recommend and justify the overall audit strategy appropriate for this engagement. Relevant learning outcomes This assessment task contributes to your achievement of the following unit learning outcomes (ULOs): • ULO 2: Use professional and ethical judgement in applying relevant legal and professional pronouncements to all stages of a given assurance engagement. • ULO 3: Apply the concepts and processes used by audit and assurance service providers to plan and perform assurance engagements in a professional manner.  Marking Criteria The following will be used in making this assignment: Marks will be deducted if your answers contain large amounts of text copied from textbooks or any other reference material. If you are unsure about this please refer to the section on plagiarism in the unit guide. Criterion* Weight (%) DGLO 1: Discipline-specific knowledge and capabilities 40% DGLO 2: Communication 20% DGLO 5: Problem solving 40% Overall 100% * Refer to the detailed marking rubric. 8 Marking Rubric  Criteria Unsatisfactory Less than satisfactory Satisfactory Good Very good Excellent DGLO 1: Discipline- specific knowledge and capabilities – This assessment task assists the student to demonstrate the ability to apply discipline- specific knowledge to solve real-world type audit problems. 0 16 23 27 31 40 Did not use auditing knowledge. Did not adequately use auditing knowledge. Used some auditing knowledge. Used an adequate amount of auditing knowledge. Used an almost exemplary amount auditing knowledge. Used an exemplary amount of auditing knowledge. DGLO 2: Communication – This assessment task helps the student to demonstrate the ability to effectively communicate in writing and further develop written communication skills. 0 8 11 13 14 20 Is unable to justify and correctly interpret theoretical propositions, methodologies, conclusions and professional decisions to specialist and non- specialist audiences. Is very little able to justify and correctly interpret theoretical propositions, methodologies, conclusions and professional decisions to specialist and non- specialist audiences. Acceptably justifies and interprets theoretical propositions, methodologies, conclusions and professional decisions to specialist and non- specialist audiences. Justifies and interprets theoretical propositions, methodologies, conclusions and professional decisions to specialist and non- specialist audiences. Justifies and interprets a wide range of theoretical propositions, methodologies, conclusions and professional decisions to specialist and non- specialist audiences. Justifies and interprets a wide range of theoretical propositions, methodologies, conclusions and professional decisions to specialist and non- specialist audiences. DGLO 5: Problem solving – A case study to be used in this assessment simulates real-world auditing issues and problems. 0 16 23 27 31 40 Proposes no or inadequate solutions that indicate obvious lack of comprehension of the problem. Solutions do not reflect any intellectual independence. Proposes few solutions that indicate very little comprehension of the problem. Solutions reflect very little intellectual independence. Proposes one or more acceptable creative solutions that indicates satisfactory comprehension of the problem and reflects a proficient level of judgement of the pros and cons of the various options and independence of thought. Solutions reflect basic intellectual independence. Proposes one or more good creative solutions that indicates comprehension of the problem and reflects a generally sound level of judgement of the pros and cons of the various options and independence of thought. Solutions reflect reasonable intellectual independence. Proposes one or more very good creative solutions that indicates a deep comprehension of the problem and reflects a mostly  high level of judgement of the pros and cons of various solutions and factors impacting on decision making within a professional context. Solutions reflect a high level of intellectual independence. Proposes one or more exemplary creative solutions that indicates a deep comprehension of the problem and reflects a consistently high level of judgement of the pros and cons of various solutions and factors impacting on decision making within a professional context. Solutions reflect a exceedingly high level of intellectual independence. Total 0 40 57 67 76 100   Zero Below 50% 50 – 59% 60 – 69% 70 – 79% 80% and over

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Please answer only 4 Questions (300 words are enough for each question) I wou

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Please answer only 4 Questions (300 words are enough for each question) I would like you to focus on the following. First, please read the course outline, relevant materials as suggested in the course outline, Lecture and tutorials materials. Then: •       Introduce yourself with other members in this forum •       You can share your idea about how much difficulties you faced for your personal tax return. •       What is your basic understanding about Taxation Law in Australia? 01.       Residence and Source Nick Stannos arrives in Australia from a European country on 26 January. He rents a small apartment and accepts two jobs. By 30 June he has saved $10,000 and decided to return to Europe permanently. 1.       For the relevant income year, will Stannos be regarded as a resident or non-resident? In any event, what difference does it make? 2.       If Stannos had remained in Australia indefinitely and was regarded as a resident of Australia from 26 January, how would his European salary income of A$20,000 (derived in the period 1 July to 24 January) be taxed? Assume ex-Australia tax of A$3,000 has been paid in respect of this income. 02.       Income from Property 1.      George owns a large cattle firm, parts of which are heavily timbered. He agrees to allow Mr Smith to enter his land for the purpose of felling timber in return for a payment of $20 per tree removed. During the first tax year of his agreement, George receives $10,000 from Smith. What are the tax consequences of this transaction? Would your answer differ if Smith had promised to remove the timber? 2.      The following year, George contracts to sell Smith 9,000 trees for $90,000. Smith is to enter George’s land for the purpose of felling and removing the trees, and is to pay the money by monthly instalments regardless of whether the timber is removed or not. The agreement provides that if 9,000 suitable trees are not found upon the land, then there shall be a pro rata decrease in contract price. 3.      In the following year, George decides to sell his farm to Brown for the sum of $200,000 plus “royalty” of $10 for every tree removed from the land for the next 10 years. Advise George in each of the above situations as to his tax liabilities. Also advise him as to whether his receipts are income or capital on general principles. (Note that these cases are governed by CGT event DI) 03.       Income Classification Briefly discuss the income tax implications of the following, stating which sections of the ITAA 1997 or ITAA 1936, if any, are most relevant. 1.      A $10,000 bonus paid by the Australian Cricket Control Board to the captain of the Australian cricket team for outstanding leadership during a successful tour of England. 2.      A boat valued at $35,000 given to an amateur footballer to turn professional. 3.      Profit of $25,000 made by a trucking company on the disposal of one of the 30 trucks it has leased to carry on its business. 4.      An exchange gain of $500,000 made by a manufacturer in respect of money borrowed in 1997 and used to finance construction of a new building. 5.      Gift and payments made by a football club and its supporters to a star professional player, largely in their delighted response to his being selected to play for Australia. The club gave him a car valued at $25,000; supporters, through a collection at one game, gave him $2,425. 04.       Capital Gains Tax Because of his wife’s ill-health, Brain sold his gift shop and family home in Victoria and moved to WA on 20 June this year. Brain had acquired the vacant premises 10 years ago for $750,000 and established the business on that date. He sold the business on 20 May this year for a net consideration of $1,880,000. This was made up as follows: Items   AUD $ 1          Goodwill         440,000 2          Trading Stock 60,000 3          Fittings            120,000 4          Shop and Land           1,360,000 5          Less debt taken over secured over stock and fittings         (100,000) In addition, Brain received a further $20,000 for signing a contract not to open another business within a 10 Km radius for the next five years. The turnover of the shop for the previous financial year was $540,000. Brain’s home is valued at $1.8m. He also has a 45% interest in a property development company which has assets of $5.4m. His wife also has a 5% interest in that company. The turnover of the property development company last year was $1.2m. Advise Brain of the tax consequences arising from the sale. 05.       Fringe benefit tax The taxable value of fringe benefits provided by XYZ Ltd to its employees for the current FBT year is: •Cars – $32,000; input tax credits are available for GST purposes •Loans – $6000; no GST has been paid • expense payments – $4,000 inclusive of GST. An input tax credit is available. Calculate FBT payable for the year. 06.       Capital Allowance Explain tax consequences for following term: •Pooling of Assets •Low – value pool assets •Software development pool •Small business concessions

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BAO 2203 Corporate Accounting Assignment Semester 2 2014 Newcrest Mining Ltd

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BAO 2203 Corporate Accounting Assignment Semester 2 2014 Newcrest Mining Ltd (NCM Ltd) – Impairment of assets Please read through the articles provided on VU collaborate and answer the following questions.  Please note that in order to gain a superior result you will need to undertake extensive research on the topic of impairment and of NCM Ltd. Marking scheme: Question                     Total marks    Student score 1          When should companies undertake an impairment test?  10        Red coloured words are my questions. 2          In the case of Newcrest Mining Ltd  (NCM), was the cause of the impairment operational, financial or both? Explain.        6 3          What effect will the impairment have on the cash flows, balance sheet and financial performance of a company? Why is it NCM Ltd.’s preference to have a debt ratio of 15%? Explain.         8 4          How does the impairment of assets affect the strategic decision making of NCM Ltd?  Why and from whom is NCM Ltd “under pressure” to conduct a capital raising?     6 5.         Is the impairment material? How do you know? Discuss any additional disclosure requirements NCM Ltd should make with respect to the impairment of assets.             6 Presentation, grammar, spelling, references.          4 Total                40 Converted                   20% Student advice in undertaking this assignment: You should undertake an extensive literature review on the topic of impairment to gain an understanding of its application. Refer to relevant accounting standards, the Framework and ASX requirements in answering the questions. Refer to other companies that have had to undertake an impairment to gain general knowledge of its application. Relate this knowledge with the NCM Ltd case. You may need to go back and refer to your previous accounting studies, for example to improve your knowledge on ratio analysis. Ensure you undertake a “spell check” of the assignment.  Use the Academic Support for Students www.vu.edu.au/language-learning or e-mail studentlearning@vu.edu.au. ASSIGNMENT PREPARATION AND SUBMISSION GUIDELINE This is a group assignment (2 students per assignment). Individual submission without the permission of the unit coordinator will NOT be accepted. The assignment question will be provided in the unit space of the VU Collaborate. THE ASSIGNMENT MUST BE HANDED IN TO YOUR LECTURER IN THE LECTURE THEATRE AT THE END OF THE WEEK 8 LECTURE. Students must submit both the printed copy along with an assignment cover sheet and an electronic copy of assignment through the Assessment Dropbox in the VU Collaborate unit space assigned for the assignment submission. Failure to submit both a printed copy and an electronic copy through VU Collaborate will result in a fail grade. DO NOT HAND IN YOUR ASSIGNMENT UNDER YOUR TUTOR’S OFFICE DOOR OR VIA E-MAIL. This assignment counts towards 20% of the total assessment.  Any assignments handed in late without prior permission of the lecturer/tutor will be penalised 1 (out of 20) mark per day. Special Requirements for assignment that must be adhered to: •       Hand in one assignment per group of two students and read drafts of each other’s work to ensure quality and consistency. •       The two partners must be from the same tutorial class. •       Assignments are to be no longer than 2000 words in length. •       Font: size – 12-point; style – Calibri; •       Line spacing: one and a half (1.5) line spacing, write on one side of the (A4) paper. •       Page margin: 2.54 cm/ 1 inch on each side (right, left, top and bottom) •       Insert page number •       College of Business Assessment declaration form: must be completed, signed by all the partners and included. •       Ensure that the front page contains the title, your name, your ID number, and importantly, your tutorial day and time. •       Your report must display headings (as presented in the marking scheme) and sub-headings to help establish its structure and aid the marking process. •       The referencing system you are required to use is the Harvard System. It is important you show evidence of research for the assignment beyond Deegan 7e and the articles. Ensure these are referenced appropriately in your bibliography.  Assignments not using the Harvard system, showing no evidence of research for information or are obviously plagiarised will be returned unmarked. •       The similarity percentage must NOT exceed 20 per cent. •       Assignments will be penalised severely where plagiarism (copying directly from textbooks, journal etc. without due recognition) has occurred. •       Do not use plastic covers or folders for your assignment.  Simply staple it together. •       Assignments will be handed back to students in their tutorial in WEEK 12. •       You need to RESEARCH the topic in depth to gain a favourable mark.

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ECONOMICS FOR MANAGERS MPE781/981 T2.2014 Assignment Due date:        Monda

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ECONOMICS FOR MANAGERS MPE781/981 T2.2014 Assignment Due date:        Monday, 11:59pm, September 8, 2014. Nature:            Individual assignment. Assignment Overview:           This assignment is partly based on the attached article, “Australian Housing Market Review,” by Arnhem Investment Management, November 2012. Please read this article carefully before attempting the questions. You will be required to demonstrate your understanding of economic concepts taught in the unit and relate them to the cases in the article. Learning Objectives: This assignment is designed to encourage you to think about the applications of economic concepts learned in this unit to real world scenarios. Assessment:   Based on the attached Rubric, your assignment will be graded on your use of appropriate economic theory and concepts, clarity of exposition and overall quality of your answers. Your answers should follow “Guide to assignment writing and referencing”, available at this link: http://www.deakin.edu.au/current- students/assets/resources/study-support/study-skills/assign- ref.pdf. Questions: Answer all questions. Limit the total word count of your assignment to less than 3,000 words. Depth is encouraged over breadth: that is, it is more important that you demonstrate you understand a concept fully, rather than talk about 3 related concepts only cursorily. You are encouraged to provide necessary graphs, figures and data wherever possible. Please be careful in implementing referencing styles. Total mark: 40 marks. Allocation as indicated next to the question. Your score on this assignment contributes towards 40% of your final score for this unit. Submission:    This assignment must be submitted electronically on D2L (DSO) Dropbox area by all students by 11:59pm on the due date. No hard copy is required. Print your name and student ID clearly on the first page of your answers. Please check the Academic Honesty and Misconduct section in the Unit Guide. Submitting your answers automatically implies that you have read and accepted the Plagiarism and Collusion Declaration, and that the submitted answers are entirely your own work. Question 1: (8 marks) In your own words, summarize the article, “Australian Housing Market Review,” by Arnhem Investment Management, November 2012. In particular, what are the main messages of the article? Question 2: (8 marks) Using appropriate diagrams, figures and data to answer: Are the Melbourne’s housing prices overvalued? Why or why not? Question 3: (8 marks) Suppose that the Melbourne’s housing market is perfectly competitive (i.e., many real estate developers). The city government decides to levy a buyer’s tax (specific tax) on housing purchases. Using appropriate diagrams to answer: (a). Examine the impacts of this buyer’s tax on the equilibrium housing prices, consumer surplus, producer surplus, and total surplus (or social welfare). (b). Can an increase in the buyer’s tax raise social welfare? (c). Can an increase in the buyer’s tax raise city government’s revenue? Question 4: (8 marks) Suppose that city government decides to develop a new housing area (i.e., the city government is like a monopolist). Using appropriate diagrams to answer: (a) If the city government’s objective is to maximize profits, what would be the housing price set in this new area? (b) If the city government’s objective is to maximize revenue, what would be the housing price set in this new area? (c) If the city government’s objective is to maximize welfare, what would be the housing price set in this new area? Question 5: (8 marks) Find at least three countries or economies that have housing policies or measures to stabilize the housing markets. Provide your views or suggestions on the best measure to stabilize the housing markets that could be considered or used in Melbourne.

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QUESTION 1 The recent events in Syria, Iraq and the fear that the unrest will

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QUESTION 1 The recent events in Syria, Iraq and the fear that the unrest will spread to other Middle Eastern oil producing nations have world markets worried about the disruption to oil production.  Using graphical demand and supply analysis, explain the impact on price and quantity in the market for petrol if oil production is disrupted. 3 Marks QUESTION 2 Ceteris paribus, if a tax on petrol results in a large rise in the price of petrol, using graphical demand and supply analysis, explain what would be the impact on price and quantity in the car market for low fuel efficient cars (cars that use more petrol per kilometre) compared with high fuel efficient cars. (Hint: you must answer using separate graphs to compare the impact on market price and quantity on the two types of cars).                                     2 + 2 = 4 Marks QUESTION 3 Assume, health officials in Hong Kong simultaneously engaged in the mass slaughter of chicken in an attempt to control the spread of chicken flu and warned consumers against purchasing live chickens.  Using demand and supply analysis, what is the impact on price and quantity in the market for live chickens?                                                                    4 Marks QUESTION 4 If the price of a good increases from $6 to $8, leading to a fall in quantity demanded from 50 to 35 units, what is the price elasticity of demand for the good at this price range?  Explain what the calculated elasticity value means.                                                                       3 Marks QUESTION 5 a)         The smoking of tobacco is claimed to impose great external costs to society. Briefly discuss two external cost factors indicating HOW each factor imposes an external cost to society 2 Marks b)         One of the many strategies the Australian government has used to reduce the external costs is by increasing the tax on tobacco. With the use of demand and supply analysis explain the possible impact of this strategy on the market for tobacco.                         4 Marks QUESTION 6 Assume, in an industry where firms are making an economic profit, the creation of an internet platform has broken down entry barriers and resulted in a huge increase in the number of firms entering the industry.  What will be the implication on profit to the existing firms in this industry? Use graphical demand and supply analysis to support your explanation.                                                                                                                       5 Marks QUESTION 7 In an Oligopoly structure where a few firms dominate and control the majority of the market there is often an absence of price competition. Use the game theory matrix to explain why this is so?  What are the alternatives available to firms to maintain or increase their market share?                                                                                                                           5 Marks Jesse Singh (July 2014).

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Holmes Institute HI5025 Memo 03 – Semester 01, 2014 Background: In 2010, th

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Holmes Institute HI5025 Memo 03 – Semester 01, 2014 Background: In 2010, the Water Accounting Standards Board (WASB), an independent advisory Board to the Australian Bureau of Meteorology, issued The Exposure Draft of Australian Water Accounting Standard 1: Preparation and Presentation of General Purpose Water Accounting Reports (ED AWAS 1) and asked for comments from accounting practitioners, industry, and/or industry peak bodies. There is great concern that proposals in the ED AWAS 1 will significantly affect how major users of water resources report their water usage and may result in the need to result in new types of assets, liabilities, and expenses. Required: 1) Go to http://www.bom.gov.au/water/standards/documents/ed_awas1_v1.0.pdf and download the WASB ED AWAS 1, 2) Read the downloaded document, and 3) Write a memo to Mr Petre Pan the President of (Mountain Goat Beer Pty Ltd (at the Corner North & Clark Streets, Richmond Victoria 3121) that summarizes the above report and lists and discusses any issues that it raises that could significantly affect the Micro-brewery and its financial reporting (e.g. taxes and new accounting obligations).

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Assignment 2 Value: 15% Submission method options Hand delivery (option appl

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Assignment 2 Value: 15% Submission method options Hand delivery (option applies to Internal only) Alternative submission method Task This assessment task consists of four (4) questions. A total of 60 marks are allocated to the questions below, which will then be converted to a mark out of 15%. Rationale This assessment task is designed to assess your understanding of topics 3 to 6. Marking criteria General marking criteria Short answer questions In the awarding of marks for short answer questions, consideration will be given to: • Evidence of understanding of the key issues identified in the question; • Active analysis of identified elements as appropriate; • Clear indication of reading of the texts, readings and other relevant references as appropriate; • Clear and logical written expression; and • Appropriate referencing. Practical questions In the awarding of marks for practical questions, consideration will be given to: • Correctness of answers; • Appropriate formatting and headings; • Relevant workings; • Approach taken to solve the problem; and • Completeness of answers. A detailed marking rubric has been provided in the ‘Requirements’ section below for each question. Presentation Physical presentation of assignments It is essential that presentation of assignments adheres to accepted standards in relation to neatness and layout, as you are practising to present material in a work situation. Correct formatting and referencing procedures of material should be strictly adhered to for essays. You should submit a proper reference list (using APA referencing style) for all essay type assignments. A reference list contains only those works cited or quoted from in your essay. A bibliography is acceptable for practical-type assignments. For practical questions: • all journal entries must include narrations unless otherwise specified; • any ledger accounts should preferably be shown in ‘T’ account format and dates and descriptions be included; • journal entries and ledger accounts must reflect the strict order of sequence of events; • financial statements (including extracts) should include proper headings and accord with presentation standards. Penalties will be incurred if material is not correctly referenced and if presentation is not of an acceptable standard. Please also note the following: • Journal entries, ledger accounts, worksheets and financial statements should always balance. If you have to submit a piece of work that does not balance because you cannot detect your error please include some comment about the source of your problem so the marker can provide appropriate feedback. • Include workings where appropriate. Partial marks can be allocated for workings where the final answer is incorrect. Requirements All workings, when appropriate, must be shown to substantiate your answers. Question 1 [15 marks] Events after the reporting period Bob Ltd is finalising its financial statements for the reporting period ending 30 June 2014. On 21 July 2014, before the financial statements have been finalised and authorised for issue, the company’s directors became aware of the following situations: a) 2 July 2014: The directors proposed a dividend of $10,000. b) 3 July 2014: The directors approved the sale of an off-shore agency to another entity for a profit of $30,000. c) 4 July 2014: The company received an invoice from a supplier for $85,000 for goods delivered in June; the goods were included in closing inventory at an estimated cost of $100,000. d) 5 July 2014: The company executed a guarantee in favour of the banks for an outstanding loan of $1,000,000 that the bank made to X Ltd, the company’s major supplier, in January of that year; the guarantee was executed because the bank was demanding payment, which would have disrupted inventory supplies. e) 6 July 2014: An agreement was signed to take over a production facility in Adelaide at a cost of $5,000,000, which will be paid for using a long-term finance lease. f) 7 July 2014: The Australian Taxation Office waived fines for the inclusion of incorrect information in the company’s 2012 income tax return; the adjusted return was reflected in the company’s financial statements and the fine of $30,000 was recognised as an expense and liability at reporting date. Required: i) Given that financial statements are prepared for the financial period up to the reporting date, explain why there is a need for a standard that refers to events occurring after the reporting date. (3 marks) ii) Explain whether the above events will be classified as either adjusting or non-adjusting events after the end of the reporting period (assuming the amount is material), providing reasons for your decision. State the appropriate accounting treatment for each event in Bob Ltd’s 2014 financial statements. (12 marks) (Source: Adapted from Deegan, C. (2010). Australian financial accounting. (6th edition) Sydney: McGraw Hill.) Marking Guide – Question 1 Max. marks awarded i) Discussion re the need for a standard that refers to events occurring after the reporting date. 3 ii) Classification and justification/discussion of events 6 Stating the appropriate accounting treatment for each event 6 Total 15 Question 2 [15 marks] Accounting for share capital The constitution of Henrietta Sweeney Ltd indicated that the company could issue up to 5,000,000 ordinary shares and 1,000,000 preference shares. Prospectuses had been drafted offering 1,000,000 preference shares at $1.50 payable in full on application by 31 March 2014, and 2,000,000 ordinary shares at $1.20 with 50% due on application by 31 March 2014, 25% due on allotment, and 25% due on a call to be made by the directors at a later date. By 31 March 2014, the company had received amounts due on 800,000 of the preference shares and on applications for 2,400,000 ordinary shares. On 15 April 2014, the ordinary and preference shares were allotted. The ordinary shares were allotted to applicants on a pro rata basis and the amounts received in excess of that due were to be credited against amounts due on allotment. The amount due on allotment of the ordinary shares was due by 15 May 2014 and this was received on all shares. The directors made the call on the ordinary shares on 31 August 2014, with amounts due by 30 September. By this date, amounts due on 1,997,000 ordinary shares had been received. On 15 October 2014, the shares on which call money was not received were forfeited and sold as fully paid. An amount of $0.75 was received for each share sold. Costs of the forfeiture and reissue amounted to $800, and were paid. The constitution does not provide for refund of any balance in the forfeited shares account after reissue to former shareholders. Required: Prepare the journal entries to record the transactions of Henrietta Sweeney Ltd up to and including that which took place on 15 October 2014. Show all relevant dates, narrations and workings. (Source: Adapted from Dagwell, R., Wines, G., Lambert, C. (2012). Corporate Accounting in Australia. (1st edition) Sydney: Pearson Australia.) Marking Guide – Question 2 Max. marks awarded Journal entries 11.5 Dates 1 Narrations 1 Workings 1.5 Total 15 Question 3 [15 marks] Accounting for income tax Twinkle Ltd commences operations on 1 July 2013 and presents its first Statement of Profit or Loss and Other Comprehensive Income, and first Statement of Financial Position on 30 June 2014. The statements are prepared before considering taxation. The following information is available: Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2014 $ $ Gross profit 420,000 Royalty revenue (exempt income) 30,000 Expenses: Administration expenses 75,000 Salaries 150,000 Long service leave 15,000 Warranty expenses 20,000 Depreciation expense – plant 80,000 Insurance 30,000 370,000 Accounting profit before tax 80,000 Assets and liabilities as disclosed in the Statement of Financial Position as at 30 June 2014 $ $ Assets Cash 10,000 Inventory 110,000 Accounts receivable 40,000 Prepaid insurance 15,000 Goodwill 20,000 Plant – cost 400,000 Less: accumulated depreciation 80,000 Total assets Liabilities Accounts payable 35,000 Provision for warranty expenses 10,000 Loan payable 225,000 Provision for long service leave Total liabilities Net assets 230,000 Other information: • All administration and salaries expenses incurred have been paid as at year end. • None of the long service leave expense has actually been paid. It is not deductible until it is actually paid. • Warranty expenses were accrued and, at year end, actual payments of $10,000 had been made. Deductions are available only when the amounts are paid and not as they are accrued. • Actual amounts paid for insurance are allowed as a tax deduction. • Amounts received from sales, including those on credit terms, are taxed at the time the sale is made. • The plant is depreciated over five years for accounting purposes, but over four years for taxation purposes. • The tax rate is 30%. Required: i) Determine the balance of any current and deferred tax assets and liabilities (using appropriate worksheets) as at 30 June 2014, in accordance with AASB 112. Show all necessary workings. (9 marks) ii) Prepare the journal entries to record the current tax liability and movements in deferred tax assets and liabilities. (2 marks) iii) What would your answer for part (a) if the following items on the statement of profit or loss and other comprehensive income were changed: ‘Gross profit’ was $360,000 (instead of $420,000) and the ‘Royalty revenue (exempt income)’ was $90,000 (instead of $30,000). Show all calculations and necessary workings. (4 marks) (Source:Adapted from Deegan, C. (2010). Australian financial accounting. (6th edition) Sydney: McGraw Hill.) Marking Guide – Question 3 Max. marks awarded i) Determination of taxable income and current tax liability, and workings 4 Determination of deferred tax balances 5 ii) Journal entries 2 iii) Determination of impact on current and deferred tax balances, and workings 4 Total 15 Question 4 [15 marks] Property, plant and equipment Petersen Ltd has the following land and buildings in its accounts as at 30 June 2014: $ Residential land, at cost 1,000,000 Factory land, at valuation 2011 900,000 Buildings, at valuation 2010 800,000 Accumulated depreciation (100,000) At 30 June 2014, the balance of the revaluation surplus is $200,000, of which $100,000 relates to the factory land and $100,000 to the buildings. On this same date, independent valuations of the land and building are obtained. In relation to the above assets, the assessed fair values at 30 June 2014 are: $ Residential land, previously recorded at cost 1,100,000 Factory land, previously revalued in 2011 700,000 Buildings, previously revalued in 2010 900,000 The company has adopted fair value for the valuation of non-current assets. The company tax rate is 30%. Required: i) Prepare journal entries to record the revaluations on 30 June 2014. Petersen Ltd classifies the residential land and factory land as different classes of assets. (12 marks) ii) The directors of Petersen Ltd are now concerned about the impact of reporting the decline in the fair value of the factory land in the company’s financial statements. They have now asked you (the company accountant) to use the 2011 valuation for the 2014 financial statements, stating that the decline in value of the factory land is only temporary and will increase again in the near future, after a nearby multi-million dollar development is approved. You need to prepare a response to the directors’ request. Provide references to AASB 116 to support your answer. (Word limit: 200 words) (3 marks) (Source: Adapted from Deegan, C. (2010). Australian financial accounting. (6th edition) Sydney: McGraw Hill.) Marking Guide – Question 4 Max. marks awarded i) Journal entries 12 ii) Response to directors’ request 3 Total 15 Marking criteria The assessment rubric for this assessment task is provided below. The detailed allocation of marks for each question has been provided above for your information.

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