can you finish it by tomorrow 6 pm??
Trimester 2, 2017
Accounting 100 Group Assignment (Minimum 3, maximum 4 members from the same class per group)
The assignment must be typed, use Arial font, 12 and hard copy submitted in lecture Week 10 to your lecturers at the commencement of lectures.
Please ensure you attach a KOI assignment cover sheet with all members of the group, names & ID number and signed. The assignment is worth 20 course marks of your grade (out of 40 total marks scaled to 20). The assignment consists of three (3) questions. Two questions relate to ethical issues and the other relaters to use of ledger accounts.
Use Harvard referencing where necessary.
Late assignments will be penalised, 10% deduction per day.
Question 1 (10 marks) Ethics and Governance – The impact of a bonus incentive scheme on the financial statements
Lucia works as an accountant for a motor vehicle engine parts manufacturer called Vroom Ltd, owned by an international car firm. Her manager, Freda Chuse, is paid a bonus depending on the profitability of the company. If Vroom Ltd makes $1 million profit, Freda receives a bonus of $20 000 that increases progressively to $30 000 for a $3 million profit. If the profit of Vroom Ltd exceeds $3 million, Freda receives the maximum bonus of $30 000. Vroom Ltd currently receives a grant from the government of $100 000 per year to employ and train apprentice mechanics.
At the end of May, it appears that Vroom Ltd will make a profit of approximately $3.5 million for the year ending 30 June 2016. Freda approached Lucia and said that if the company made too much profit then the government may stop paying Vroom Ltd the grant for training apprentice mechanics, and it would lose the $100 000 tax-free cash inflow. Freda instructed Lucia to find ways of deferring recognition of as much revenue as possible until the following financial year, for which the forecasts for the industry were quite poor, and to accrue as many expenses as possible at the end of the current accounting period when it came to making the end-of-period adjustments. Although Lucia was not happy with this instruction, she did not want to risk her own opportunities for promotion by upsetting her manager.
A. Who are the stakeholders in this situation?
B. Why do you believe Freda asked Lucia to do this?
C. What are the ethical issues involved her?
D. Can Lucia defer revenues and accrue as many expenses as possible and still be ethical?
Note: Your answer should not exceed 700 words.
Question 2 (15 marks) – Ledger Posting and Trial Balance
Carrying Your Load provides heavy freight services with large trucks. The following transactions were Carrying Your Load. Ignore GST.
Craig Dienhoff invested $620 000 into Carrying Your Load organised to provide trucking services to remote parts of Australia.
Purchased a truck for $540 000 on credit from P. Strickland.
Transferred the amount owing to P. Strickland using online banking facilities to make a direct bank transfer.
Paid $1600 to R. Burton for two weeks rent to 14 July.
Charged White Cattle Station $12 000 for trucking services.
Dienhoff withdrew $4000 cash to meet personal expenses.
Paid $1200 for advertising on local radio.
Received $6200 from Outback Oil for trucking services.
Charged Star Company $9600 and received $9000 from Hardie Company for trucking services provided.
Received a cheque for $12 000 from White Cattle Station and deposited it into the business bank account. Paid $8800 for fuel for the truck.
A. Record all transactions directly into ledger T accounts and prepare a trial balance.
Question 3 ( 15 marks ) Ethics and Governance
Review the CPA and ICANZ websites (links below) and write a short essay quoting three recent examples (2016 and 2017 only) to demonstrate how breaches of ethical standards were seriously treated by the professional organisation.
1. Explain why the penalties were imposed (5 marks)
2. Referring to APES 110 standards (available on Moodle), which sections should have applied to your three mentioned examples? (5 marks)
3. Were the penalties imposed by the accounting bodies sufficient? Give reasons.
Note: Your essay should not exceed 1,000 words. Recent examples should be limited to between 2016 and 2017. Use Harvard Referencing.
Hint: You must to refer to: