Reference no: EM133931761

Accounting for Managers

Question 1
Bank Reconciliation is considered an effective instrument in ensuring effective financial management of companies. Companies are required to prepare Bank Reconciliation Statement (BRS) which is an essential tool in accounting, allowing businesses to reconcile their cash balance on the company's books with balance reported by the bank. This reconciliation ensures that the financial records are accurate and complete, identifying discrepancies such as outstanding cheques, deposits in transit, or bank errors and preventing fraud and forgery.

The following information relates to the business of Fairfield Solutions for June 2024. The "Cash at Bank" account in the ledger of Fairfield Solutions shows a credit balance of $14,500. All entries from the bank statements are reflected in this balance. However, Fairfield Solutions' bank statement shows a debit balance of $14,600. The books of Fairfield Solutions indicate that three cheques were recorded in the cash payment journal. However, a cheque of $1,350 has not been presented to the bank for payment. Furthermore, Fairfield Solutions' records show that a cheque of $1,480 was entered as a deposit in the cash receipts journal, but the bank has not recorded this cheque by 30thJune 2024.

Required:
Prepare a bank reconciliation for Fairfield Solutions on 30thJune 2024.

Question 2
Management of inventory forms an integral part of logistics and effective inventory management requires inventory optimizing methods. It is crucial for businesses to ensure that the cost of goods sold (COGS) and ending inventory values are accurately reflected in financial statements. Different methods, such as periodic system with a weighted average and perpetual system with a moving average, can be used to calculate these figures of inventory management. The choice of method can significantly impact a company's reported profits and inventory values.

The following information relates to Lakefront Books Ltd.

Required:

i. Using a periodic system and the weighted average method, calculate the cost of the 12 items in inventory as of 30 June and the cost of goods sold for the year.

ii. Analyse the impact of using the moving average method under a perpetual inventory system on the cost of ending inventory and the cost of goods sold. How might this method affect the financial statements compared to using the weighted average method under a periodic system?

Question 3
Companies underscore the need for effective accounts receivable management which is critical for their businesses to ensure that sales on credit are converted into cash. However, not all receivables may be collected, leading to bad debts. Companies use various methods to estimate and record these potential losses. One common approach is the allowance method, specifically the income statement method (percentage of net credit sales method), which estimates bad debt expenses based on a percentage of total credit sales. This method helps align expenses with the revenues they help generate, thereby providing a more accurate financial picture.The following information relates to the accounting practices of Greenfield Consulting Ltd. Get expert online assignment help in the USA.

Greenfield Consulting Ltd. records bad debt using the allowance method based on a percentage of net credit sales. In 2023, the company recorded $750,000 in credit sales. The estimated percentage of uncollectible accounts is 3.5%. On February 5, 2024, Greenfield Consulting identified one uncollectible account from Willow Corp for $1,500. However, on April 15, 2024, Willow Corp unexpectedly paid its account in full.

Required:Record the following journal entries:

i. Year-end adjusting entry for 2023 bad debt.

ii. Entry on February 5, 2024, for the identification of the uncollectible account.

iii. Entry on April 15, 2024, for the payment of the previously written-off account.

Question 4
The terms property, plant and equipment, plant and machinery and plant assets are referred to as non-current assets with physical substance acquired by a business entity for producing goods and services instead of reselling to customers. They are expected to provide economic benefits for more than 12 months and their costs are allocated over their useful lives through depreciation. Proper accounting for the purchase and depreciation of non-current assets ensures accurate financial reporting and helps in understanding the true value of a company's assets over time.The following scenario pertains to the acquisition and depreciation of machinery by Lakeside Manufacturing Ltd.

Lakeside Manufacturing Ltd. Planned to expand its operations and, for this purpose, purchased a machine on July 1, 2021, to enhance its operational efficiency. The machine is estimated to have a useful life of ten years. The purchase invoice indicates that Lakeside Manufacturing Ltd. Acquired this machine for $650,000. Additionally, freight expenses of $12,000 and installation charges of $14,000 were incurred.

Required:
Based on the above information, calculate the following:

i. The total cost of the machine.

ii. The annual depreciation expense (assuming Lakeside Manufacturing Ltd. uses the straight-line depreciation method).

iii. The balance of accumulated depreciation as of June 30, 2023.

Question 5
Part (A)
Everlasting Enterprises Ltd. adjusted its provision for Warranties on June 30, 2024, to ensure it equalled 5% of sales. The company prepares its financial reports annually on June 30. The sales for the year ended June 30, 2024, were $1,200,000. The opening balance of the Provision for Warranties

On October 15, 2024, a successful warranty claim was made on Everlasting Enterprises Ltd. for faulty goods, amounting to $800.

Required: Prepare the following journal entries:

i. The general journal entry on June 30, 2024, to adjust the provision for warranties to the required level.

ii. The journal entry on October 15, 2024, to record the payment of the warranty claim.

Part (B)

You have recently completed SAP/4HANA project task. Reflect on the challenges and learning outcomes related to managing the procurement process using SAP. Consider the following points in your reflection:

i. Understanding and Navigation: How confident do you feel about navigating the SAP S/4HANA interface after completing the tutorial? Were there any specific areas of the system that you found particularly challenging or intuitive? Explain your experience.

ii. Practical Application: How did the tutorial enhance your understanding of the procurement process in a real-world business context? Provide examples of how the SAP system supports efficient procurement and financial management.

iii. Problem-Solving: Discuss any difficulties you encountered while completing the assignment. How did you overcome these challenges? Reflect on the problem-solving strategies you employed.

iv. Impact on Future Learning: How do you think the skills and knowledge gained from this tutorial will benefit you in your future studies or career? Are there specific aspects of the SAP system you would like to explore further?