Accounting Business Reporting for Decision Making

154 Accounting: Business Reporting for Decision Making

4.36 Comprehensive problem of preparing a worksheet, statement of profit or loss and

balance sheet    LO6

The following business transactions and business events relate to Danielle Chan’s Business Con-

sultancy Pty Ltd.

2017

June 1

4 5 6 7 8 9

10

15

16

16

23

28

30

Danielle commences business with $15 000 given to her by her Aunt Kate.

Purchased new computer for her business $1200 on credit.

Received $500 for services rendered.

Paid rent on office for June $400.

Negotiated with Ingrid and Olivia possible casual employment contracts totalling $1500.

Aunt Kate injected a further $2000 gift into Violet’s business.

Billed a client $500 for services rendered.

Received an invoice for new reception desk $3400.

Paid for telephone connection fee $65.

Sent a quote for a large prospective job $4800.

Paid gas charges $231.

Received $250 for consultation work completed.

Paid in full for the reception desk bought on 10 June 2016.

Paid advertising $200.

Required

a. Prepare a worksheet for the business transactions for June.

b. Enter these transactions into ledger accounts for the business.

c. Complete a statement of profit or loss and balance sheet for Danielle Chan’s Business Consul-

tancy Pty Ltd for the period ending 30 June 2017.

Decision-making activities

4.37 Go to http://www.jbhifi.com.au and find the consolidated statement of profit or loss and consolidated

balance sheet for JB Hi-Fi Ltd in the latest annual report.

Required

Use these statements to answer the following questions.

a. What is meant by the JB Hi-Fi Ltd ‘consolidated’ statement of profit or loss?

b. What is the total value of each of the following items at the end of the current reporting year in

the JB Hi-Fi Ltd consolidated accounts? For each item, classify as an asset, expense, revenue,

equity or liability. Provide reasons for your classification.

i. Cash and cash equivalents

ii. Sales and marketing

iii. Occupancy expenses

iv. Cost of sales

v. Provisions

vi. Inventories

vii. Plant and equipment

viii. Intangible assets

c. The key statistical data is provided at the bottom of the statement of profit or loss. For

each item, summarise the change occurring between 2014 and 2015 and what this means for

JB Hi-Fi Ltd.

d. What is the purpose of providing two years of comparative figures for the financial state-

ments (i.e. 2014 and 2015)? How would this information be useful to one of JB Hi-Fi Ltd’s

shareholders?