Topic: task1, questioin a, b, c

a) Three main business structures have been discussed this semester, namely, sole proprietor, partnership and company. You

are required to prepare a report on the form of business entity you would choose to start this business and explain why you

would choose a particular structure. In making your suggestion you should point out the reasons and relative advantages and

disadvantages of each. In addition, advise on and briefly report on the business registration/licences required for statutory

and regulatory arrangements for the business to operate. Your report should be submitted with proper referencing.
(5 Marks)

b) Discuss the issues in relation to the share of profits for Christina and David given that the contributions made by each

are different. This should be done in the context of the recommended structure you have chosen. You are not required to

consider any accounting entries for profit sharing but discuss the implications of your proposed arrangements and

recommendations. (3 Marks)

c) Using the transactions given above prepare a worksheet for the month of July and using your worksheet, prepare a balance

sheet, income statement and cash flow statement for the month of July. State any assumptions you make in preparing these

accounts together with appropriately cross referenced footnotes to explain your assumptions. (You do not need to account for

tax of any kind). Download the worksheet available on Moodle to record your entries. You must submit a completed worksheet,

income statement, balance sheet, cash flow statement and notes (assumptions).
(12 Marks)

Note: parts a) to c) should not exceed 8-12 pages in total including 4 pages for worksheet, income statement, cash flow

statement and balance sheet.

ASSIGNMENTS

Semester 2, 2012

GSB 9004 Accounting for Business

Unit leader: Lorena Mitrione CPA

Assessment Details
o    This major assignment accounts for 45% of the total marks for the subject and comprises two parts; assessment tasks 1

and 2.
o    Assessment task 1 carries 20 marks.
o    Assessment task 2 carries 25 marks.
To be eligible to pass the subject, students have to complete all assessment tasks, and must achieve a minimum of 50% in the

final examination.
Assignment guidelines
o    Assessment task 1 is to be completed individually without any collaboration with other students.
o    Assessment task 2 is to be completed as a group. Groups will be formed in the second lecture and confirmed by the

third lecture.  Group sizes are to be a minimum of 3 students with no more than 5 students.
You are advised to commence organising your group assessment tasks no later than week 2 so as to start early on some aspects

such as downloading of data and other relevant information. This will allow time for you to familiarise yourself with

downloaded information so that you can apply knowledge gained in lectures.
Submission Details
o    Use a minimum font size of 12 point and a minimum margin of 2.5 cm on the left and right hand side of the page.

Staple the assignment in the top left hand corner.
o    Students are to take the maximum word limits that are detailed for each task as a guide only. The word limit excludes

calculations, appendices, tables and charts.
o    Assignments must be submitted with the Faculty cover sheet attached. This can be accessed at:

o    Ensure that all sources of information are acknowledged in your bibliography. The Faculty’s policy on plagiarism can

be read at: 
o    Use the Harvard System (author-date system) for citations. Monash University’s online citation and referencing guide

can be accessed at:     http://www.lib.monash.edu.au/tutorials/citing/harvard.html
Due Dates
Assessment Task 1         5 p.m. Thursday 13 September 2012
Assessment Task 2        5 p.m. Thursday 4 October 2012
Late assignments will not be accepted and extensions will not be granted.

ASSESSMENT TASK 1

This task is to be completed individually and accounts for 20 marks of the assessment for GSB9004. The objective of the task

is to give you an understanding of basic accounting concepts underlying the recording of business transactions and the

preparation of financial reports.  You will also critically analyse the management and accounting issues arising from the

choice of appropriate business entity structures.
TASK

Background

Christina Adams and David Ng recently completed their professional accounting qualifications, registered as tax agents and

obtained all the necessary individual licenses as well as professional registrations required to operate as individuals.

During the three years in which they were fulfilling their work requirements for their professional status Christina managed

to save $55,000 and David $27,500.  The two friends had always wanted to run their own practice, so they rented premises and

ed for business.

Although you have decided to start the business you had to do research on:
€¢    What sort(s) of business entity(s) you will need (sole proprietor, partnership or company (public or private);
€¢    What registration processes and agencies are involved given the structure you have chosen as well as how each

person’s holding in the business would be apportioned for the purposes of an appropriate agreement.

You carried out the appropriate registrations prior to July 2012 and acquired the necessary resources.  You then commenced

business operations on 1 July 2012 as this coincided with the beginning of the tax year.  You were to own a portion of the

business based on the proportion of your capital contributions.

The following records were kept of transactions and events that took place during the month of July.

July 1    Jointly deposited $82,500 in the business bank account.
Paid six months’ rent in advance on premises, $1,800.
Placed an order with Stationery on Stuart Street Printers for stationery, business cards and letterheads. The stationery is

expected to last for one year.
Paid Telstra a connection fee of $140 for the telephone, fax and internet connections.
Signed a three-year lease with Caulfield Office Supplies Pty. Ltd. at a rent of $160 per month for furniture, office

equipment, telephones and fax.  The business paid for the first month’s rental.
Hired Paula Mastrilli as an office assistant commencing immediately.
Paid annual accounting membership fees for both Christina and David of $300 each.
2    Paid Promotional Signs $1,500 for a sign advertising the business to be placed outside the premises.
Paid $235 to advertise in the Daily News.
3    Purchased a computer from B&W Computers for $4,000, with payment due in 15 days.
4    Received the ordered goods from Stationery on Stuart Street Printers €“ payment of $420 due on receipt of goods.
4 €“ 11    David completed a number of tax returns for clients with a total billing of $4,840. Clients are given 30 days credit.
15    Signed a contract with XYZ Ltd for Christina to provide tax and bookkeeping services to the company.  The terms of

the contract were that Christina would spend one day a week at the XYZ Ltd offices and be paid a weekly fee of $3,250.
Christina paid herself and David a fortnightly salary of $2,200 each.
Pay Paula a fortnightly salary of $900.
16    Received a payment from one of the clients (listed above: 4-11 July) of $2,250.

Signed a three-year lease on a BMW at $1000 per month for Christina to use for business purposes, payable one month in

advance on the 16th of each month.  The first payment was made today for the first month of the lease.
David withdrew $5,000 from the business to pay for his daughter’s school fees.
18    Paid for the computer, purchased from B&W Computers.
22    Received $3,250 weekly fee from XYZ Ltd.
David completed tax returns with a total billing of $4,525 on 30 days credit.
Christina and David completed tax returns with a total of $4,500 for cash.
23    The liquidator of one of your clients has informed you that your client who used your services (period: 4-11 July)

has no assets and will be unable to pay the $800 amount owing.
29        Received $3,250 weekly fee from XYZ Ltd.
Christina paid herself and David a fortnightly salary of $2,200 each.
22 -31    Both completed work for additional clients amounting to $5,595. One of these clients paid $595 in cash; the rest were

given 30 days’ credit.
Paid Paula a fortnightly salary of $900.
Paid internet and telephone a total of $350.
Paid postage $50.
Paid the month’s electricity bill of $660.

State any assumptions you make about particular transactions you feel are necessary in the notes to your accounts.
Additional Information
The computer has a useful life of 4 years and a residual value of $400.
The stationery purchased is expected to last for one year and is to be consumed evenly over this period.
The business contracted to clean the office has not been paid for their July services. The amount owing is $550.

Required:

a)    Three main business structures have been discussed this semester, namely, sole proprietor, partnership and company.

You are required to prepare a report on the form of business entity you would choose to start this business and explain why

you would choose a particular structure. In making your suggestion you should point out the reasons and relative advantages

and disadvantages of each.  In addition, advise on and briefly report on the business registration/licences required for

statutory and regulatory arrangements for the business to operate. Your report should be submitted with proper referencing.
(5 Marks)

b)    Discuss the issues in relation to the share of profits for Christina and David given that the contributions made by

each are different. This should be done in the context of the recommended structure you have chosen. You are not required to

consider any accounting entries for profit sharing but discuss the implications of your proposed arrangements and

recommendations.  (3 Marks)

c)    Using the transactions given above prepare a worksheet for the month of July and using your worksheet, prepare a

balance sheet, income statement and cash flow statement for the month of July. State any assumptions you make in preparing

these accounts together with appropriately cross referenced footnotes to explain your assumptions. (You do not need to

account for tax of any kind). Download the worksheet available on Moodle to record your entries.  You must submit a completed

worksheet, income statement, balance sheet, cash flow statement and notes (assumptions).
(12 Marks)

Note: parts a) to c) should not exceed 8-12 pages in total including 4 pages for worksheet, income statement, cash

flow statement and balance sheet.

N.B. A worksheet is available on Moodle for you to use.
ASSESSMENT TASK 2

This task is to be completed as a GROUP task and accounts for 25 marks of the internal assessment in GSB9004. The objective

of this task is to appreciate the analytical method of ratio analysis.
TASK
Select three companies from an industry of your choice from the list below. Companies should be selected from the following

industries:
Industries:
€¢    Energy
€¢    Consumer Discretionary
€¢    Consumer Staples
€¢    Industrials
€¢    Utilities
€¢    Metals and Mining
€¢    Materials
€¢    Health Care
€¢    Information Technology
€¢    Telecommunications Services.
Ensure that the following is available for the companies you select
€¢    Access to annual reports
€¢    Five years of historical data
Companies in a particular GICS industry classification can be identified from numerous sources including

In completing this analysis, you can download the relevant ratios for the period from
Aspect Fin Analysis or Dat Analysis at

http://www.aspectfinancial.com.au/af/finhome?xtm-licensee=finanalysis

Or you can access it directly from the databases from the Monash Library section of the website.
To do this, go to www.monash.edu.au
Click on Library
Under Online resources, select Databases
Select Companies & Industries.
You should see the following:
Aspect Fin Analysis: See Fin Analysis (connect”‚more information)
Select connect
Select Connect to Fin Analysis via Direct Connection
It will ask you to Authcate as it is only available to students and staff of Monash University
Once you authenticate, you will be taken to Aspect Huntley Fin Analysis.
Select Company Profiles.
It will ask you to insert an ASX code or part of the company name.
Once you have entered either the ASX code or company name, click on the relevant company and then refer to the relevant

sections as listed on the left hand toolbar such as:
Annual financials.  From here you can access quite a bit of information, such as financial ratios, annual reports.  You can

access Ratio Analysis from here.

Required:

Prepare a report containing the following:
€¢    Analyse the companies’ profitability, efficiency, liquidity, capital structure and market performance for the past

five years. Identify possible factors/reasons for the change in ratios and compare (reporting on any differences) the

performance and position of the companies. (10 Marks)
€¢    Of the three companies you have chosen, based only on the perspective of the ratios you have prepared and your

analysis, which company represents the best investment and why? (5 Marks)
€¢    The performance of an entity is normally monitored both inside and outside the organisation.  Performance evaluation

within the entity is not restricted to external information. Internal performance evaluation can use information from a

variety of sources.  One such framework is the balanced scorecard.
o    Explain the balanced scorecard framework. (4 marks)
o    Suggest two (2) goals and performance measures for the company you have advised me to invest in for three of the four

perspectives of the balanced scorecard framework (DO NOT PROVIDE GOALS AND PERFORMANCE MEASURES FOR THE FINANCIAL

PERSPECTIVE).  (6 Marks)

You are required to present your findings in a formal report.  The Student Q Manual is recommended as your source for

referencing and for structure and requirements of a written formal report.  The Q Manual is available on the Monash intranet.

(Word limit: 3,000 words excluding figures, tables and calculations)

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