workout retained profit and 1- Prepare a worksheet outlining the transactions of
ID: 2487141 • Letter: W
Question
workout retained profit and
1- Prepare a worksheet outlining the transactions of HIGH Energy Ltd in February and March 2016. Ignore tax.(Your worksheet should include the initial balances and the adjustments where necessary according to the additional information collected)
2.Prepare an income statement for the period from 1 February to 31 March 2016;
3.Prepare a classified balance sheet as at 31 March 2016;
4.Prepare a classified cash flow statementor the period from 1 February to 31 March 2016
You have recently joined Business Smart, a financial and business consultation firm. Your manager James Brown will take family leave for four weeks. He has asked you to prepare a consultation report for an important client, HIGH Energy Ltd, before he returns on 19 May HIGH Energy Ltd is a fast growing company utilising national and global resources to provide a variety of energy solutions to South Australian businesses. Despite rapid business expansion and integration of energy sales and services, the company's accounting and reporting quality is of concern. The Chartered Accountants Australia and New Zealand CAANZ) Adelaide Branch has recently completed a survey of financial reporting by HIGH Energy Ltd and found that the company's accounting records were incomplete and in particular the recognition of revenues and expenses was not consistent with accrual The Managing Director of HIGH Energy, Matthew Rice, was unhappy about these results and asked Business Wealth to reorganise the accounting records and financial statements for February and March 2016, and report any issue of concern about the business performance. In addition, the company has been under public scrutiny recently because of its high carbon emissions and the associated financial risk. As a response, Matthew is thinking about reporting on HIGH Energy's environmental protection activities including recent investment in renewable energy such as solar, wind and biomass. You are given the following account information from the Balance Sheet of 31 January 2016 Accounts Cash and cash equivalents Accounts Receivable $72,300,000 $88,050,000+ $ 5158 $191,000,000 $86,490,000 Property, Plant and Equipment $975,050,000 Accounts Payable Bank Loan Share Capital Retained Profit Notes to the above information: 1 Trade and other receivables are all included in Accounts Receivable. $66,900,000+$ 112 356,800,000 $915,550,000 Inventories include all raw materials, work-in-progress and finished goods. Property, Plant and Equipment (PPE) is a net amount. The original cost of PPE is $1,324,507,500 and accumulated depreciation is $349,457,500. Trade and other payables such as expenses payable are all included in Accounts Payable.Explanation / Answer
Cash in Feb: =18375500+260600+42510325-1755000-789620-960000
Cash in March = =706600-1755000-330000-450500
Accounts Receivable in Feb = =760600-42510325
Accounts Receivable in Mar =509200-706600+9345600
Inventories in Feb = -460800
Prepayments in Feb = =960000/12*11
Prepayments in March =-960000/12
Property, Plant and Equipment in Feb = Depreciation = -202,000
Property, Plant and Equipment in Mar = 8017200-238450
Accounts Payable in Feb = =-789620+330000
Accounts Payable in Mar =8017200-330000
Accrued expenses - Salaries = =1755000/2
Bank loan in Mar - no change
Share Capital in Feb = +18375500
Share capital in Mar = no change
Insurance expense in Feb and March = =960000/12
Revenue in Feb = =260600+760600
Revenue in Mar =509200+9345600
Salaries and Wages in Feb = 1755000
Salaries and Wages in Mar = =1755000+(1755000/2)
Advertising, COGS and Interest expense is staright from the problem
Depreciation in Feb as given = 202,000
Depreciation in March = 202,000+ ((8107200-817200)/20)/10 = 36,450
For the new equipment considered depreciation for 10 months for the year 2016
Balance Sheet as of March 31, 2016
Statement of Income for the months Feb and March:
Retained earnings:
Opening balance = Total assets as of Jan 31, 2016 - Total Liabilites and Share capital = 73,640,000
+ Net income for Feb and Mar = 4,646,750
Ending balance = 78,286,750
High Energy Ltd Work Sheet for Transactions in Feb and March Feb-16 Mar-16 Cash and Cash equivalents 57641805 -1828900 Accounts Receivable -41749725 9148200 Inventories -460800 Prepayments 880000 -80000 Property, Plant and Equipment -202000 7778750 Total Accounts Payable -459620 7687200 Accrued expenses 877500 Bank loan Share Capital 18375500 Retained earnings Total Insurance expense 80000 80000 Revenue 1021200 9854800 Salaries and Wages 1755000 2632500 Advertising expense 330000 COGS 460800 Interest expense 450500 Depreciation 202000 238450Related Questions
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