FNSACC504 - Prepare Financial Reports for a Corporate Entity

Assignment Information

• Students are required to select a company that is currently listed on the Australian Stock Exchange and obtain its latest Full year annual report. 
• The annual report must be provided as downloaded from the Company website you have chosen and submitted as part of your assignment submission. (A link to the document is not acceptable)
• No two students are to select the same company.
• Assignments must be properly laid out so that required information is easily located and identified.
• Each question answered must show cross referencing to the appropriate page number, and item referred to in the annual report must be highlighted. All other data must be referenced appropriately to their source
• All workings must be shown
• Assignment cover sheet must be attached before submitting assignment for marking (Cover sheet has been provided in MyLearning
• It is recommended not to choose a company whose share price is currently below $1

Requirements

Question 1

The report you have obtained is a “general purpose financial report” which must be prepared by all “reporting entities”

• Define a “General Purpose Financial Report” and what purpose it is used for.
• What defines an entity as a ‘Reporting Entity’?

Question 2

Select a Financial article related to the company you have chosen, the article must:

• Must be less than 6 months old (Published within the last 6 months)
• Must be from an appropriate Published source. Cannot be published from the Company’s website and written by the Company you have chosen.
• Content is required to suggest some financial implications for the company you have chosen.

Students are required to:

1. Give a brief description of the article (10-12 lines only)
2. Describe what the Financial Implication is and how it will affect the profitability of the company both in the short and long term (5 – 10 lines)
3. Attach the article to your assignment (A Link to the article is not acceptable)

Question 3

Provide the following information about the company you have chosen (ensure you reference all data obtain from external sources)

1. What is the full name of the company?
2. What are the company’s main activities?
3. What is the purpose of the corporate governance statement in your companies report and what does it state?
4. What is the purpose of the audit statement and who are the auditors of the company?
5. Who is the company’s largest shareholders and what is their shareholding?
6. List the name of one controlled entity of this company.

Question 4

Provide the following financial and other information about the company’s own statutory accounts.

1. What are the names of the financial statements included in the Annual Report?
2. and what does each statement basically show?
3. What is the net profit/earnings before tax for the current year?
4. Show the number of dividends (if any) that was provided for or paid by the company during the current year.
5. What were the total current assets reported this year?
6. What were the total non-current liabilities reported this year?
7. What is the total shareholders’ equity for this current year?
8. What is the total issued capital of the company in Dollar value? You must also state the class of shares and the number of shares in each class.
9. State the names and positions of each member on the Board of Director – From the Directors point of view discuss the following:

• Ethical considerations in relation to conflict of interest,
• Confidentiality
• Disclosure requirements

Note: Refer to Directors reports for comments on the above issues

Question 5

Assume your company requires additional funds for expansion, or for the development and marketing of a new product, etc. 

Refer to the Liabilities section and your owners’ equity section of the Financial Reports AND the appropriate notes for an idea of how the Company is currently being funded

• You are required to suggest the types of Financing/Funding it may consider obtaining these funds (list at least three types of funding instruments)
• You are to suggest an appropriate Integrated Accounting system that would allow a Company this size to operate efficiently
• Give reasons you have chosen the software package

Question 6

Due to the current financial crisis your company your company has decided to raise additional equity capital to retire debt and provide additional working capital within the organisation. Assume that the company has decided to increase its issued ordinary capital by making a rights issue of:  1: 10 to existing shareholders of ordinary shares at an issue price of 50% below the current market value of the shares.

The terms of the issue are:

• 50% of monies payable on application
• 50% of monies payable via a call to be made within 6 months of the issue of shares being made. 
• The issue was fully subscribed with all shareholders taking up their entitlements.  
• • Issuing debentures @ 8% with a par of $1,000 and maturity date in 2015.
  • The company will be increasing its’ debt by 50% via this debenture issue.
  • The total amount raised must be equal to an increase of 50% on total debt currently held. (Both short term and long term) 
  • The debenture issue was oversubscribed by 20% above the amount the company wishes to raise.
  • The terms of the issue permit the company to retain excess monies up to 20% of the amount it intends to raise.However, the holders of 10% of the shares issued did not meet their call obligations and failed to remit the required monies.

    You are required to:

    1. Define equity capital and working capital
    2. What is a “rights issue”?
    3. What is the current share price of the company?
    4. How many shares will the company issue? (Round figures to nearest thousand.)
    5. What will the issue price be? (For small priced shares round to nearest dollar)
    6. What factors may have influenced the price for the above rights issue to be set at a 50% discount to the current market value of the shares?
    7. How much money will the company raise from this issue?
    8. You are required to prepare all general journal entries arising from the issue and subsequent call.

     

    (All workings must be provided)

    Question 7

    The company also decided to raise some funds through an increase in debt by:

  You are required to show general journal entries for the issue of the debentures and any related entries.

  You must state in your answer the following:

  1. What total debt is at the present time broken up into short term and long-term debt.
  2. How much the company wishes to raise
  3. How much the company actually received
  4. How much the company is retaining.

   

      (All workings must be provided)

  Question 8 – MYOB Task

You are required to use the information obtained in your Annual Report to create a Company in MYOB.

1. Input Company Details into MYOB, e.g., Company name, ABN, etc.
2. Use the Balance sheet in the Annual report to establish opening Balances in your Chart of Accounts. Obtain a Report of your Opening Balance sheet
3. Input all of the Journals created in Question 6 into MYOB
4. Input all of the Journals created in Question into MYOB

Reports Required:

• Opening Balance Sheet
• All Journals Report
• Closing Balance Sheet

NOTE: Week 7 is dedicated to provide assistance in completing this task