Rmit - Acct 2060 Introductory Accounting Assignment

Topics: Balance sheet, Generally Accepted Accounting Principles, Financial statements Pages: 8 (1445 words) Published: October 16, 2012
ACCT 2060 Introductory Accounting
Assignment - Semester 1, 2012

Part A

Question 1

In the course of the financial year, Blackmores’ principal operating activities focused on the development and marketing of natural health products such as vitamins, herbal and mineral nutritional supplements. They sell and have operations in the natural health and dietary market throughout Australia, New Zealand and Asia region. (Reference: Blackmores’ Annual Report 2011, Pg. 37)

Question 2

Mr Marcus C. Blackmore AM is the Chairman of Blackmores’ Group. (Reference: Blackmores’ Annual Report 2011, Pg. 35)

He held 4,479,278 fully-paid ordinary shares in the company at the end of their 2011 financial year. (Reference: Blackmores’ Annual Report 2011, Pg. 36)

Question 3

1) Consolidated Income Statement
2) Consolidated Statement of Comprehensive Income
3) Consolidated Statement of Financial Position
4) Consolidated Statement of Changes in Equity
5) Consolidated Statement of Cash Flows

(Reference: Blackmores’ Annual Report 2011, Pg. 51 - 55)

Question 4

The entire Note 3 deals with Significant Accounting Policies. (Reference: Blackmores’ Annual Report 2011, Pg 60)

Blackmores uses the straight-line method to depreciate property, plant and equipment. (Reference: Blackmores’ Annual Report 2011, Pg 62)

The underlying assumption of this method is that the usefulness of assets is being divided evenly over its useful life. (Reference: Investopedia ULC 2012)

Question 5

Corporate governance is defined as the system by which companies are directed and controlled. (Reference: Accounting - An introduction, 4th edition, Pg. 42)

Principles of Blackmores’ corporate governance as follows: 1) Lay solid foundations for management and oversight
2) Structure the Board to add value
3) Promote ethical and responsible decision-making
4) Safeguard integrity in financial reporting
5) Make timely and balanced disclosure
6) Respect the rights of shareholders
7) Recognise and manage risk
8) Remunerate fairly and responsibly

(Reference: Blackmores’ Annual Report 2011, Pg. 30 - 31)

Question 6

The purpose of the audit is to ensure that the Annual Report provided by the company is in accordance with the Australian Auditing Standards and the Corporations Regulations 2001. It helps to depict an accurate and unbiased view of the consolidated entity’s financial positions and of its performance for the year ended as at 30 June 2011, (Reference: Blackmores’ Annual Report 2011, Pg. 49)

Blackmores engaged Deloitte Touche Tohmatsu Limited for their audit in 2011. (Reference: Blackmores’ Annual Report 2011, Pg. 47)

Question 7

(Reference: Blackmores’ Annual Report 2011, Pg. 51)

Sales and Royalties
(Reference: Blackmores’ Annual Report 2011, Pg. 51)

It comprised of:
1) Gain / (loss) on disposals of property, plant and equipment 2) Government grants received for market development
3) Net foreign exchange gain
4) Net exchange losses on forward exchange contracts

(Reference: Blackmores’ Annual Report 2011, Pg. 68)

Question 8

(Reference: Blackmores’ Annual Report 2011, Pg. 55)

It differs because cash receipts can be found in the cash flow statement from sale of goods and services that involves cash flow movement within the company whereas sales figure is found in the income statement consisting of cash and non-cash transactions. Part B

Question 1

i. Current ratio:

For the year 2010:
Current Ratio = Current Assets / Current Liabilities = $80,485,000 / $34,457,000 = 2.3 times

For the year 2011:
Current Ratio = Current Assets / Current Liabilities = $78,521,000 / $33,221,000 = 2.4 times...
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