ACCT101 Assignment 2 1 Robert Lim Yock - 8659635

Question 1
a)
Assets = Liabilities + Owners Equity
Tran. Cash
Accounts
Receivable
Inventory Equipment

Accounts
Payable
Unearned
Revenue
Bank
Loan

Barnett,
Capital
Net Income
Revenues -
Expenses
Open 53,600 3,900 17,800 33,000 5,700 52,600 50,000
1/5 -20,000 -20,000
3/5 -2,000 -2,000
4/5 1,800 -1,800
5/5 5,040 -4200 5,040 -4,200
9/5 500 500
11/5 -3,000 3,000
14/5 -1,000 -1,000
20/5 -3,750 -3,750
25/5 -600 -600
30/5 200 -200
Balance 30,590 2,100 13,600 36,000 3,900 500 32,600 49,400 5,040 -9,150
Total Assets = $82,290 Total Liabilities = $37,000 Total Owners Equity = $45,290








ACCT101 Assignment 2 2 Robert Lim Yock - 8659635
b)
Bruces Burger
Business
Balance Sheet
For the month ended
30 May 2014
$ $
Owners
Equity
45,2
90
Represen
ted by


Current
Assets

Cash 30,5
90

Accounts
Receivab
le
2,10
0

Inventory 13,6
00
46,2
90
Non-
Current
Assets

Equipme
nt
36,0
00
Total
Assets
82,2
90

Less:
Current
Liabilitie
s

Accounts
Payable
3,90
0

Unearne
d
Revenue
500 4400
Non-
Current
Liabilitie
s

Bank
Loan
32,6
00

Net
Assets
45,2
90



Bruces Burger Business
Cash Flow Statement
For the month ended 30 May 2014
$
Operating Cash Flows
Receipts from customers 7340
Rent Paid -1000
-2000
Salaries Paid -3750
Total Operating Cash Flows 590

Investing Cash Flows
Payment for fixed assets -3000
Total Investing Cash Flows -3000

Financing Cash Flows
Loan repayments -20,000
Withdrawals by owners -600
Total Financing Cash Flows -20,600

Net increase in cash held -23,010
Opening cash balance 53,600
Closing cash balance 30,590



ACCT101 Assignment 2 3 Robert Lim Yock - 8659635
c) One adjustment the accountant should make at the end of the month is depreciation on
the equipment. This would be recorded by reducing the equipment value and having the
difference as an expense. Depreciation should be recorded to record the lessening value
of the asset as it is being used over this period of time. A second adjustment the account
should make is taking into account the interest on the bank loan by increasing the value
of the loan and having the difference as an expense. This should be recorded to reflect
the increasing value of the loan as interest is added to it.

d) Cash accounting systems and accrual accounting systems differ in that they recognise
transactions at different times. Cash accounting only records transactions when money
is exchanged while accrual accounting records revenue when it is earned and expenses
when they are incurred, regardless of if money is exchanged at that time. Because of
this, the events on the 3
rd
, 4
th
, 9
th
and 30
th
of May would be recorded differently under a
cash accounting system.

3/5 Buying the inventory would not be recorded until the customer buys it.
4/5 The transaction would not be recorded as accounts receivable in April, but instead
as cash on the 4
th
of May.
9/5 The $500 would be recognised as a revenue instead of a liability (unearned
revenue).
30/5 The bill would not be recognised until the bill is actually paid in June.


Question 2

a)

Profitability and Efficiency 2013 2012
Return on
Assets
EBIT
Average Total Assets
13.9% 13.7%
Profit Margin
EBIT
Net Sales
0.201
Gross Profit
Margin
Gross Profit
Net Sales
0.315 0.381

Financial Risk Analysis: 2013 2012
Current Ratio
Current Assets
Current Liabilities
4.54 4.11
Acid-Test Ratio
Current Assets
Prepayments Inventory
Current Liabilities
4.21


(all figures rounded to 3 s.f.)
1
(6,137,054 - 4,202,719) = 0.315
(7593056-512452-37864)/1673827
ACCT101 Assignment 2 4 Robert Lim Yock - 8659635


Cost of sales = 4,202,719
Total Revenue = 12,032,000


Current Assets= 7,593,056/ 3,898,204
Current Liabilities = 1,673,827/ 948,153



1,234,692= EBIT


To: Jolene Madison
From: Robert Lim Yock
Date: May 20, 2014
Subject: Burger Fuel financial analysis report

Dear Mrs. Madison,
I have completed an analysis on Burger Fuel Worldwide Limiteds Annual Report 2013, the
findings of which I will present here. Burger Fuel is a New Zealand based gourmet burger
food chain with 59 locations around the world. They were founded in Auckland in 1995 and
currently operate in 7 countries worldwide, with plans to expand elsewhere. Their biggest
source of income is from sales of goods.
Gross profit margin
Profit margin
Return on assets
Current ratio
Acid-test ratio