Finance and Accounting Assignment Questions

Popular Questions for Finance and Accounting Assignments

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Q.Suppose you are the entrepreneur of a business in an emerging market. What are the advantages, you believe, you may derive by considering crowdfunding to raise funds for your business? What can be the disadvantages of such crowdfunding?

Q.Is crowdfunding very much unique? How it differentiates from the traditional ways of sourcing funds?

Q.What factors, you think, are critical to the successes of a crowdfunding program?

Your task is to answer the above questions in the form of a report, along with an executive summary and an introduction and a conclusion.

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Consider any 8 stocks’ daily data for 1 year from FTSE100

Q. Verify the stationary of the selected 8 stocks’ time-series using ACF test

Q.Briefly explain mean-variance portfolio optimization

Q.Estimate the co variance matrix for the selected 8 companies’ stocks

Q.You need to present the results from the above tasks in a report form ( 2500 words) for a fund manager who is interested in creating a portfolio using the selected 5 companies. In the report, you need to give a brief introduction on the methods and their limitations using the existing literature. The report must be submitted on moodle.

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Q.Students are required to prepare the Annual Report for Cycle Kingdom Pty Ltd for the year ended 30 June 2016. The annual report should include the following documents (in the following order):

–    the external financial statements excluding the Statement of Cash Flows, but including all of the notes to the accounts;
–    the Director’s Declaration; and
–    the Accountant’s Compilation Report.

There is no need to prepare a Directors’ Report or an Auditor’s Independence Declaration, as the financial report was not audited.

For the Accountant’s Compilation Report, please use the name of the firm that you created and used throughout the semester for your PBLs.
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Q.Which Accounting Standards Apply?

Cycle Kingdom Pty Ltd is considered a non-reporting entity. Hence, only special purpose financial statements are required to be prepared.

Please ensure that the financial statements (and notes to the accounts) are prepared in accordance with the recognition, measurement and disclosure requirements of all of the AASB Accounting Standards with the exception of the following four (4) AASB Accounting Standards:

–    AASB 8 Operating Segments;
–    AASB 107 Statement of Cash Flows;
–    AASB 124 Related Party Disclosures; and
–    AASB 133 Earnings Per Share.

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Q.Students are required to prepare the company’s Income Tax Return & Tax Reconciliation for Cycle Kingdom Pty Ltd for the year ended 30 June 2016

Q.Students are required to prepare a One-Page Tax Reconciliation for Cycle Kingdom Pty Ltd for the year ended 30 June 2016.Students who submit multiple documents (instead of merging into one pdf document) will incur a 10 mark penalty.
The following documents are also required to be submitted at the front of your submission:

–    the criteria sheets (on pages 30 and 31); and
–    the signed student integrity declaration (on page 29).

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Q.Explain the theory of comparative advantage.

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Q.Discuss whether good corporate governance is necessary for MNEs.

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Q.Classify the following as a transaction reported in a sub-component of the current account, or the capital and financial accounts of the countries involved:

(a) An Australian food chain imports vegetables from China.

(b) A Dutch firm engages an Australian firm to provide a service.

(c) A Chinese student, residing in Australia, pay for his study at an Australian university.

(d) A US company buys 100% share of a Japanese company.

(e) An American tourist pays for her stay at a hotel in Melbourne, Australia using her American Express Credit card

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Q.Is purchasing power parity (PPP) always an accurate estimator of exchange rate movements? Why or why not?

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Q.Suppose, the price of a luggage set in New York, USA is currently $200. The same luggage set is priced at A$250 in Brisbane, Australia. Given this information:
i.   Determine the spot rate for A$/$ if the PPP principle holds.
ii.What will be the price of this luggage set in Brisbane one year from now if the PPP holds, the US price of the luggage set remains unchanged, the US inflation rate is 0.5% and Australian inflation rate is 4%?

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Q.On August 11, 2015, Chinese Yuan’s exchange rate against the US Dollar was CNY6.3248/$; while on August 25, 2015, it was CNY6.4129/$. What was the percentage change? Was it a devaluation or revaluation of the Chinese Yuan?

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Q.Explain the term “bank reconciliation” and state the reasons for its preparation

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Q.Jalash, a sole trader received his bank statement for the month of June 2016. At that date the bank balance was sh 706,500 whereas his cash book balance was sh. 2,366,500 his accountant investigated the matter and discovered the following discrepancies:

  1. Bank charges of sh 3,000 had not entered in the cash book
  2. Cheque drawn by Jalash totaling sh. 22,500 had not yet been presented to the bank
  3. He had not entered receipts of sh 26,500 in his cash book
  4. The bank had not credited Mr. Jalash with receipt of sh. 98,500 paid into the bank on 30th June 2016
  5. Standing order payments amounting to sh 62,000 had not been entered into the cash book
  6. In the cash book Jalash had entered a payment of sh as sh 79,400
  7. A cheque for sh 15,000 from a debtor had been returned by the bank marked “refer drawer” but had not been written back into cash book
  8. Jalash had brough forward the opening cash balance of sh 329,250 as a debit balance instead of a credit balance
  9. An old cheque payment amounting to sh 44,000 had been written back in the cash book but the bank had already honoured it
  10. Some of Jalash’s customer had agreed to settle their debts by paying into his bank account. Unfortunately, the bank had credited some deposits amounting to sh. 832,500 to another customer’s account. However, acting on information from his customers, Jalash had actually entered the expected receipts from the debtors in his cash book

Required:

  1. A statement showing Jalash’s adjusted cash book balance as at 30 June 2016
  2. A bank reconciliation statement as at 30 June 2016

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Q.For the past 10-month period from 1 September 2015 to 30 June 2016, Holly Gardiner (the contract bookkeeper) has been using MYOB to process transactions for Cycle Kingdom Pty Ltd. She has been presenting Luke and Cameron with quarterly Profit and Loss Statements and Balance Sheets of the business.

However, Luke and Cameron do not have an accounting background and readily admit that they struggle to read and understand the MYOB management accounts presented to them by their bookkeeper, Holly. Being more visually orientated, they ask you to prepare a financial dashboard for them. The financial dashboard is to be prepared using the four quarterly figures presented in the EXCEL spreadsheet that is available to download from the AYB 339 Blackboard site.

The financial dashboard for the four quarters is to be prepared in such a way that enables you to present and highlight key financial information, financial ratios and trends of the business over the four quarters in a highly visual way. The financial dashboard should primarily consist of graphs and charts.

Please use the four quarters financial data presented in EXCEL before any adjustments that you make in Part 2 of this case study. In other words, develop a financial dashboard based on Holly’s un adjusted figures.

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Q.For each table or graph developed in the financial dashboard, Luke and Cameron ask you to briefly summarise for them what the chart or graph is indicating. Furthermore, please identify any trends or concerns that your financial dashboard has highlighted

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Q.A professional advisor will often advise their clients on range of technical accounting and tax matters. However, in many instances clients do not possess the necessary financial expertise or technical accounting or tax knowledge to completely understand the information/advice provided by the accountant.

Over the course of your QUT degree you have acquired a range of technical and disciplinary skills that will serve you well when advising clients. These clients will come from a variety of backgrounds and, in some cases, will not understand the ‘language and terminology’ that you would ordinarily use to explain (at times) complex accounting and tax concepts.

Required:

Identify and explain three (3) strategies that you would adopt in order to simplify the content being delivered to clients.

In other words, what strategies could you implement to simplify the financial advice provided to a client (like Luke and Cameron) where they readily admit that they lack the necessary financial acumen to understand what you are saying?

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Q.Classify the following as a transaction reported in a sub-component of the current account, or the capital and financial accounts of the countries involved:
•    An Australian company imports Indian vegetables with Eurodollars on deposit in Australia.
•    A Dutch firm engages an Australian firm to provide a service.
•    A German firm pays the salary of its executive working for a subsidiary in Australia.
•    An Australian airline buys hospitality items from a US based seller.
•    An Australian firm buys 1 % share of a Japanese company.

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Q.Discuss whether good corporate governance is necessary for MNEs.

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Q.What is the International Fisher Effect? Why this concept is important to know in context of MNE?

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Q.It is Dec 2016. An Australian firm owes Rs35,000,000 to an Indian firm, to be repaid within the next two months. To keep things simplified, assume that the repayment date can be either Jan 31,2017 or Feb 28, 2017. Suppose the following information are available regarding the expected exchange rates:

Expected spot rate on Jan 31,2017 ($/A$): $0.74/A$

Expected spot rate on Jan 31,2017 (Rs/$): Rs68.54/$

Expected spot rate on Feb 28, 2017 ($/A$): $0.73/A$

Expected spot rate on Feb 28, 2017 (Rs/$): Rs70.01/$

Which of these payment dates would be more suitable for the Australian firm, assuming the firm would prefer that date that would require less Australian Dollar cash outlay at the time of repayment?

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Q.Choose a non-financial company that you would like to analyze, and obtain its financial statements. Now, select another company (preferably a competitor) from the same industry, and obtain its financial statements too. Students can obtain latest financial statements for two years (2015 & 2016) from IBIS World database.

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Q.Calculate the firm’s net profit margin, Return on Assets (ROA) and Return on Equity (ROE) and comment on the profitability. Which components of your company’s ROE are superior, and which are inferior (use DuPont analysis)?

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Q.Calculate, analyze and interpret the ratios and the other data with reference to the theoretical concepts introduced in this subject to evaluate the company’s operations and performance. How well does your selected company compare to its industry peer? Your analysis should highlight the important changes within these ratios over this period and identify the reasons if any for significant changes. Discuss limitations of this analysis.

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Q.What are the three main international bond-rating agencies? Why might companies try to maintain a given target rating on their outstanding debt?

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Q.You are an auditor and a member of an audit team. You will be provided with some financial statements for a company that requires an audit along with background information relating to the company and the industry in which it operates.
The audit partner and manager have asked you to start to prepare for the audit of the company. Within your groups you will meet within your audit teams (outside of the scheduled lesson and tutorial time) and analyse the information you have been provided.
You are required to prepare an audit planning document for the whole audit highlighting the proposed audit strategy and any areas your team considers to be of risk / concern supported by your findings.
In addition the audit partner has asked you to prepare your proposed audit testing schedule for the inventory balance which incorporates the financial statement assertions each test is attempting to address.
Your team will then present this audit plan and testing schedule to the audit partner and manager who may question the reasons behind your conclusions on the overall plan and strategy as well as the rationale behind your proposed testing of the two areas the partner indicated.

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Q.

Question 1.                                                                                                          

Ethical issue

You are the junior management accountant working for Electronics Outlet (EO) which assembles hi-fi components. EO carries a significant amount of finished goods inventory and use the perpetual inventory system. The electronic assembly industry is very competitive and the company has reported losses for the past two years. The Chief Financial Officer (CFO) is anxious that this year the company may default on the terms of a major bank loan which requires the company to maintain a minimum current ratio relationship (current assets/current liabilities).

The yearend inventory of finished goods revealed that, due to problems with suppliers, the last two assembly runs has produced hi-fi products of lower technical specifications and can be sold only for a much smaller price that normal. You have estimated that the sale value per hi-fi is $60 less than cost of producing them and a significant write down in the value of closing stock is required.

The CFO is not prepared to make any adjustment to stock prior to the year end as the business needs the bank loan to continue operations in the short term. He is confident that business will improve in the coming year and by the end of that year a stock adjustment could be made without detrimentally appearing to affect the net profit result.

Required

Use the Stakeholder Analysis framework, described in Chapter One, to briefly analyse the above situation and determine the ethical issue and make a recommendation to your manager.

Question 2.                                                                                                               

Great Sports makes athletic footwear. Processing of production orders is as follows:

At the end of each week, the production planning department prepares a master production schedule (MPS) that lists which shoe styles and quantities are to be produced during the next week. A production order preparation program accesses the MPS and the operations list (stored on a permanent disk file) to prepare a production order for each shoe style that is to be manufactured. Each new production order is added to the open production order master file stored on disk.(ACC8003)

Each day, parts department clerks review the open production orders and the MPS to determine which materials need to be released to production. All materials are bar-coded. Factory workers work individually at specially designed U-shaped work areas equipped with several machines to assist them in completely making a pair of shoes. Factory workers scan the barcodes as they use materials. To operate a machine, the factory workers swipe their ID badge through a reader. This results in the system automatically collecting data identifying who produced each pair of shoes and how much time it took to make them.

Once a pair of shoes is finished, it is placed in a box. The last machine in each work cell prints a bar-code label that the worker affixes to the box. The completed shoes are then sent to the warehouse.

Required:

  1. Describe TEN control procedures that should be included in the system.
  1. Describe the type of IT system that is most suitable for a company that mass-produces large batches of standard items in anticipation of customer demand.
  1. Describe the advantages and disadvantages of the IT system described in (b) above.

Question

Some companies have moved to vendor-managed inventory (VMI) systems.

Discuss the potential advantages and disadvantages of this arrangement.

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Q.Analytically discuss how management accounting varies from financial accounting

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Q.Analytically discuss the importance of break-even analysis with the help of a break-even chart. (500 words).

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Q.Evaluate the importance of any six operational budgets for a limited company. (650 words).   

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Q.Discuss analytically the importance of variance analysis as a cost controlling and decision making tool. (450words).