**Description:**

This assessment task has four tasks. Trainers/assessors may vary the data for the task for different students. Tasks may be scheduled according to classroom learning sessions and organised over a number of sessions to coincide with the relevant lessons and activities.

FNS60215 Advanced Diploma of Accounting Assignment-Australian Harbour International College.

- Complete the following tasks using the given data set.

Assets

$

Cash 200 000

Accounts receivable 400 000

Inventory 1 200 000

Plant 600 00

Total assets 2 400 000

**Liabilities**

$

Accounts payable 800 000

Long-term debt 400 000

Capital 1 200 000

2 400 000

Profit and loss

Sales 1 600 000

Cost of goods sold 1 000 000

Operating expenses 200 000

Interest 100 000

Taxes 100 000

Net profit 200 000

**Find the following:**

(a) Current ratio

(b) Quick asset ratios

(c) Inventory turnover

(d) Collection period

(e) Fixed asset turnover

(f) Times interest covered

(g) Net profit margin

(h) Return on total assets

(i) Return on capital.

The objective of the question is for ratio analysis. Refer following for the solution.

**FNS60215 Advanced Diploma of Accounting Assignment-Australian Harbour International College**

**Explanation:**

Answer (a) Current Ratio = Current Assets / Current Liabilities

Current Assets = Cash + Accounts Receivables + Inventory = $ 200,000 + $ 400,000 +$ 1,200,000 = $ 1,800,000 Current Liabilities = Accounts Payables = $ 800,000 Therefore, Current Ratio = $ 1,800,000 / $ 800,000 = 2.25

Answer (b) Quick Assets Ratio = Quick Assets / Current Liabilities

Quick Assets = Cash + Accounts Receivables = $ 200,000 + $ 400,000 = $ 600,000 Therefore, Quick Assets Ratio = $ 600,000 / $ 800,000 = 0.75 Answer (c) Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory

Cost of Goods sold = $ 1,000,000

Average Inventory = Closing Inventory = $ 1,200,000

Average Inventory is considered to be the closing inventory as there is no data on the opening inventory.

Therefore, Inventory Turnover Ratio = $ 1,000,000 / $ 1,200,000 = 0.83

Answer (d) Collection Period = 365 days / Accounts Receivable Turnover Ratio Accounts Receivable Turnover Ratio = Net Credit Sales / Average Accounts Receivables

Net Credit Sales = Total Revenue = $ 1,600,000

Average Accounts Receivables = Closing Accounts Receivables = $ 400,000

Average Accounts Receivables is considered to be the closing Accounts

Receivables as there is no data on the opening Accounts Receivables.

Therefore, Accounts Receivables Turnover Ratio = $ 1,600,000 / $ 400,000 = 4

Therefore, Collection Period = 365 / 4 = 91.25 days

Answer (e) Fixed Asset Turnover = Sales / Fixed Assets

Therefore, Fixed Assets Turnover = $ 1,600,000 / $ 600,000 = 2.67

Answer (f) Times interest covered = Earnings before interest / Interest

Earnings before Interest = Net Profit after taxes + Taxes + Interest = $ 200,000 + $100,000 + $100,000 = $ 400,000

Times Interest covered = $ 400,000 / $ 100,000 = 4

Answer (g) Net Profit margin = Net Profit / Revenue = $ 200,000 / $ 1,600,000 = 0.125 or 12.5%

Answer (h) Return on Total Assets = Earnings before interest and taxes / Total Assets = $ 400,000 / $ 2,400,000 = 0.1667 or 16.67%

Answer (i) Return on capital = Earnings before interest and taxes / (Total Assets – Current Liabilities) = $ 400,000 / ($ 2,400,000 – $ 800,000)Therefore, Return on Capital = $ 400,000 / $ 1,600,000 = 0.25 or 25%

**2.The following data represents sales for 2005 to 2015:**

Year Sales

2008 10 000

2009 11 000

2010 12 000

2011 12 500

2012 16 000

2013 18 000

2014 25 000

2015 40 000

2016 41 000

2017 43 000

2018 50 000

**Based on the data,**

(b) Draw the secular trend line of best fit using semi-average method.

using method of semi average trend line of best fit is drawn (attach below)

In semi average method divide the whole data series in two equal parts then find the average of two parts, from these two semi average we draw a trend line.Here after leaving year 2013 the semi average of two parts is

1st part average =5(10+11+12+12+16) = 12.2

2nd part average = 5(25+40+41+43+50) = 39.8

(c) With the data from 2009 to 2018 predict sales for 2019 with least square method of forecasting

For prediction we find estimated linear regression line as

yt=a+b∗t —–(1)

here, a and b is fitted value of parameters of model For calculation purpose year are coded as t = 1,2,3…so on starting from 2009 So, using the least square method of estimationthe estimated coefficient a and b are—

b=∑t2−n(∑t)2∑y∗t−n(∑t∗∑y)

plug in all the values from the table attach below we get b = 4.8

a = n∑y−bn∑t = 0.4

thus the trend line is yt=0.4+4.8∗t

for predict sales for 2019 i.e for t = 11 trend line is yt=0.4+4.8∗11 = 53.2

Thus predict sales for 2019 = 53200

**You are given the following data:**

2 1 1 2 1 1 3 1 2 1 0

1 1 3 2 1 4 1 1 1 0 2

**Required:**

(a) Draw a histogram.

(b) Draw a frequency table.

(c) Draw a frequency polygon.

**FNS60215 Advanced Diploma of Accounting Assignment-Australian Harbour International College**

4.Calculate the correlation coefficient between advertising (x) and sales (y).

( b ) Describe the relationship between advertising and sales.

( c ) Find the equation of the regression line.

( d ) Plot the data for the annual sales versus advertising on a scattergram using the paper below. Start the x axis from 100 and the y axis from 8.

( e ) Use the regression equation to draw the line of regression on your scatter diagram.

( f ) If advert

If advertising is $16,000 in 2015 calculate the expected sales.

X = 16

Y = ?

y = 14.7619 + 18.2857x

y = 14.7619 + 18.2857*16

y = 307.3331

Sales = 307.3331

5.Why is accurate data so important for business survival? What are some of the graphical data techniques that are used to illustrate statistics results?

If we want to predict the accurate trend of a business for its survival then we need the exact and accurate data or else the predicted trend can make wrong predictions and the business will be in loss. Graphical data techniques: Box plots, histograms, and normal probability plots, etc.

**Assessment Criteria**

The following assessment criteria will be used for marking this assessment task. Ensure that you have addressed all of the criteria in your work.

- Used appropriate data sets and statistics for calculations as required
- Complete all the given tasks
- Completed the task within a designated assessment session in presence of an assessor
- Used appropriate formulas and accurately calculated the ratios from the given financial information
- Used tables, graphs and/or charts to illustrate the data where needed
- Diagrams/graphs are appropriately labelled and coded to illustrate the data
- Data is clear, distinguishable and appropriately labelled for identification
- The answers are consistent with the model answers

**Submission Guidelines**

Submit:

- Completed tasks – Word processed
- Spreadsheets with calculations and charts/diagrams
- Copies of graphs and charts

This assessment task must be completed in a designated session in presence of a trainer/assessor.

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