Accounting Assignment: Woolworths

Task: Each student is required to adopt the financial statements of a self-selected Australian public company to use as an example and place themselves in the role of a communicator in a shareholders’ meeting (Hint: Visit www.asx.com.au to choose a publicly listed company). 1. Reading and interpreting your selected company’s latest Statement of Cash Flows What amount did the company spend on additions to property and equipment during the year? Prepare the journal entry to record these additions. What amount did the company receive from the issuance of long-term debt during the year? Prepare the journal entry to record the receipt. Provide an explanation on the latest Net Cash Increase or Decrease result. 2. Reading and interpreting your selected company’s latest Statement of Financial Position (Balance Sheet List all the current liabilities included on the latest Statement of Financial Position. What economic event caused your company to incur these liabilities? Was it an internal or external event? Which is the largest of your company’s current asset on the latest Statement of Financial Position? What percentage of total current assets does it represent? Is it favourable or unfavourable that this is such a significant asset? Explain your answer. Which is the smallest of your company’s current assets on the latest Statement of Financial Position? What percentage of total current assets does it represent? Explain why this asset would be relatively small given the nature of company’s business? What dollar amount does your company report for accounts receivable on its most recent balance sheet? What percent of the company’s total current assets are comprise of accounts receivable? Gather information from the financial statements and notes on the chosen costing method for evaluating inventory (if applicable to your company). 3. Reading and interpreting your selected company’s latest Statement of Profit or Loss and Other Comprehensive Income (Income Statement) Identify Income Statement as either applying classification using the ‘nature of expense’ method or ‘function of expense’. (Refer to AASB101 How does your company describe the point at which it recognises revenue? (Hint: refer to the notes in the annual report. Refer to AASB 118) What was the total revenue for your company for the most recent year? By what percentage did the company’s revenue increase or decrease from its total amount in the prior year? What was your company’s net income for the most recent year? By what percentage did each company’s net income increase or decrease from its net income for the prior year? What is the largest expense for each company in the latest annual report? What is its dollar amount? Explain why this might be the largest expense given the nature of company’s business? For each of the two most recent years compute the current ratio, profit margin, working capital. Compute the percentage change in the ratios. On the basis of your answers, what does the composition of the current assets tell you about your company’s liquidity? 4. Statement of Changes in Equity Were any dividends paid, and how much was reinvested in the company? How much did the company earn for each share of stock? 5. Other Elements of an Annual Report Report of Independent Accountants (Auditors’ Report) Identify the name of auditing firm included in the report. Indicate key sections of the opinion rendered by a public accounting firm. Why is it important for those who are responsible for an audit of the financial statements to be independent of those who prepare the statements? Explain your answer.