MAZIE MAY Problem-Mazie May is a business which buys cattle and sells to both the domestic and international market.
Question;BUSINESS BACKGROUNDMazie May is a business which buys cattle and sells to both the domestic and international market. Run by Mazie Arnold the business has been operating for five years on a farm located in south-west Queensland, Australia where operations are conducted. Motor Vehicles comprise two trucks, two motor cars and two motor bikes.The business has also set up a Producers Group for educational purposes. Members pay an annual fee of $600 including GST with fees payable on 1 May for the following year ($12,000 net of GST was received on 1 st May, 2009 and net $18,000 has been received on 1st May 2010). The business leases a tractor with the lease payments of $4,950 including GST made quarterly in advance. Owner?s Equityat 30 June 2009 was $395,490. All sales are on credit. Mazie May is registered for GST reporting monthly on an Accrual [non-cash] Basis.MAZIE MAY FEEDLOT INSTRUCTIONS:Transactions for July 2009 through to 31st May 2010 have already been entered into the books. The Trial Balances that follow show figures for the Adjusted Trial Balance for the year ended 30th June, 2009 and for the entries for this financial year to 31 st May, 2010.TRIAL BALANCE OF MAZIE MAYas at 31st May,As at 30th June, 20092010CreditDebitDebitCash at Bank$8,237$20,500Accounts$66,000$72,000ReceivableCattle Inventory$128,000$128,000Supplies on$23,000$1,500HandPrepaid Lease$3,000Land/Improveme $430,000$430,000nts at CostLess Accum DepImprovements$30,000Motor Vehicle atCostLess Accum DepMotor Vehicles$130,000Investments inNorthfarmersAccountsPayableGST Control$60,000Credit$30,000$130,000$49,000$49,000$60,000$98,500$55,000$$3,0004,000UnearnedMembershipFeesAccruedExpensesBank Loan$10,000$28,000$1,000$247,000$220,000Capital -Arnold$395,490$405,500Sales ? Cattle$290,000$259,180Subscriptions ?MembershipsInterestRevenuePurchases ?CattleBank ChargesAdvertising andpromotionsCartageDepreciation ?ImprovementsDepreciation Motor VehiclesElectricityInternet andWeb ExpensesMV Expenses RepairsMV Expenses ?FuelMV Expenses Ins & CTPMV Expenses ?RegistrationTelephoneWagesSuppliesExpenseInterest ExpenseLease ? TractorTotal:$12,000$1,350$1,350$116,798$136,998$395$1,150$390$1,200$1,750$2,350$8,000$12,000$2,785$1660$2,8003,602$1,950$1,800$3,710$4,700$2,100$2,100$1,820$1,800$1,325$47,850$2,100$62,000$20,000$10,000$13,500$12,500$18,000$1,052,030$1,052,030$1,137,340$1,137,340Schedule of Accounts Receivable and Payable as at 31 st May 2010Schedule of Accounts ReceivableCampbells Ltd$66,000Total$66,000Schedule of Accounts PayableState Produce Ltd$55,000Total$55,000Required ? Section 2 Project ReportYou are required to download the Excel template file and record all of the journal entries, ledger postings, worksheet and other requirements of section 2 in this Excel file.1. Record the June Journal transactions, post to the Ledgers and prepare the Unadjusted Trial Balancea) Enter the following transactions for the month of June 2010 to complete the financial year. June 1) Mazie May wrote out a cheque to pay AGC for the lease of the tractor for June, July and August $4,950 including GST. Cheque No 10012) Received and banked a cheque from Campbell?s Livestock for $50,000 being part payment of account.5) Mazie May sold the following cattle on credit to Australian Beef Buyers: 80 @ $836 each including GST10) Wrote out cheque number 1002 to pay The Chronicle for advertising $275 including GST.12) Wrote out cheque number 1003 to pay Illawarra Supplies $1,650 including GST for supplies.15) Mazie May purchased the following cattle from M & M Wrapper on account: 18 head @ $319 each including GST, 45 head @ $418 each including GST.16) Mazie May Feedlot received an account from Telstra for the telephone $528 including GST.22) Mazie May sold the following cattle on credit to Australian Beef Buyers: 5 @ $880 each including GST, 15 head @ $704 including GST. 525) Received and banked a second cheque from Campbell?s Livestock for $12,500 to reduce the balance owing on their account.26) Received Agistment Revenue of $5,500 including GST28) Wrote out cheque number 1004 to pay wages $3,600. Gross Wages $4,500, PAYG withheld $900.28) Wrote out cheque number 1005 to pay James May Motors for repairs to the truck $1,320 including GST.28) Wrote out cheque number 1006 to pay State Produce Ltd $55,000 being payment of account.30) Owner withdrew cash $2,000.30) Wrote out cheque number 1007 to pay the Telstra account received on 16 th June.b) Post the entries from the General Journal to accounts in the General Ledger and Subsidiary ledgers and reconcile the subsidiary ledgers with the Accounts Receivable Control and Accounts Payable Control Accounts in the General Ledger.c) Prepare the Unadjusted Trial Balance in the Worksheet provided2. Prepare Journal entries for ADJUSTMENTS at 30 June 2010, post adjustment entries to the ledger and prepare the Adjusted Trial Balancea) Record the following adjustments in the worksheet and record the Journal entries at 30 June 20101. Account for Tractor Lease amount for June [GST already accounted for.]2. Interest owing on loan payable for May and June $1,050 per month.3. Account for Supplies remaining on hand 30 June, 2010 ? $5,2004. Record Depreciation on Improvements ? 10 % on cost of $150,0005. Record Depreciation on Motor Vehicles ? $13,0006. Interest Revenue owing for six months to 30th June 2010 of $1,250 will be received in July 2010.7. Membership income to be adjusted for the current year ? see note on Business8. Account for Wages owing at the end of June ? $9009. Incurred bank charges for the month of June $2510. A stock take of the cattle revealed inventory on hand worth $171,458 at 30th June 2010.b) Post the adjustment entries in (a) above to the ledger and compare the ledger account balances to the Adjusted Trial Balance values in the worksheet.3. Prepare Closing entries in the Journal and post to the Ledger, complete the worksheet4. Prepare Financial Reports ? Income Statement and Balance Sheet 5. Calculate Financial Ratios and prepare reporta) Research the methods used for calculating the following ratios for 2010:? Liquidity ? Current Ratio, Quick Ratio? Operating Capacity ? Accounts Receivable Turnover, Inventory Turnover? Profitability ? ROA, ROE, Profit Margin? Financial Flexibility ? Debt Ratio, Equity Ratio, Times Interest Earned.Prepare a worksheet in your Excel file in which you calculate the required ratios using the figures from the financial reports and where necessary ending balances from the Adjusted Trial Balance for the year ended 30th June 2009 (see Trial Balance on page 3). Please ensure that you clearly show your workings (the figures used for each calculation) ? maybe set out a table for each ratio, showing the figures used in the calculation, the formula used and the final calculation (the format for this is up to your group).Prepare the following table in another Excel worksheet in which you incorporate your findings for 2010. You will need to copy and paste the table into the report in (b) below.RATIOS2008ProfitabilityProfit margin-12%ROA-15%ROE-14%LiquidityCurrent0.82:1Quick0.47:1Operating CapabilityAccountsReceivabl 2.8 timeseTurnover200920104%3%3%???2:10.85:1??4.03 times?Inventory Turnover 2.48 timesFinancial FlexibilityDebt Ratio55.6%Equity Ratio49.2%1.07 times?47%53%??TimesInterestEarned1.88 times?.67 timesb) Create a Word document file and copy and paste the completed table from (a) above in this document. Comment on the trends revealed by these ratios in (a) above, using the headings profitability, liquidity, operating capability and financial flexibility. Where possible relate the changes observed in the ratios to events in the business environment in general discussed in (c) below.c) Discuss two (2) events which have occurred in the business environment during the last 12 months which may have impacted on/or will impact on results of this type of business or businesses in general. Where possible support your argument with newspaper articles or other references e.g. extracts from reports from cattle industry.
Paper#43252 | Written in 18-Jul-2015Price : $41