ACCT11081: Introductory Financial Accounting

Student: Anudari Chimeddorj

Due Date: 11AM Tuesday 22nd May 2018

ASSIGNMENT STEP 8-11

Step 7: Inventory practices

When I read the instruction of the assignment, I though step seven was the easiest part. However, this part is the bit harder than I thought. I start to think of what I can find when I start to analyse the Select Harvest inventories. First thing I searched is inventories of the Select Harvest annual leave. I found the past three years of inventories. This below table shows the inventories of past three years of Select Harvest annual report. During the 2015 Select Harvest held the most in inventory, and then the inventories are decreasing during the year of 2016 and 2017. My question is why their inventories are decreasing every year, because the annual report does not say the reason. But, I think decreasing inventories are good and it shows this company does not have much profit loss. Also, this is good sign for improvement.

2017

($)

2016

($)

2015

($)Inventories 87,474 104,316 $142,354

The below table shows the more specific numbers of inventories, which is raw material, other inventories, and almond stocks are decreasing last three years 2015, 2016 and 2017. Finished goods are increasing last three years. This means Select Harvest should more focused on their finished goods and improve turnover.

2017($)

2016($)

2015($)

Raw Materials 4,740 7,311 9,522

Finished Goods

27,550 20,495 10,889

Other Inventories

7,368 8,804 9,684

Almond Stock 47,816 67,706 112,25987,474 104,316 142,354

Looking at my company’s annual report for what type of inventory system they use, the comment that I found on the annual report is ‘the lower of cost and net realisable value except for almond stocks at Net Realisable Value under AASB 102 Inventories’. The annual report did not list whether they use periodic or perpetual system to count inventories. I think both periodic and perpetual systems would work for Select Harvest. In additional, some recommendation to Select Harvest company. I am sure this company need to improve inventory management system, but I am not sure how to improve the inventory.

Lastly, I thought that the Select Harvest provided a very little information of their inventories, and the company does not clearly define. This assignment helps me to understand the knowledge of inventories and different methods and how that can affect to cost of sales, profit and closing inventories of value.

Step 8: Learn how to use MYOB AccountRight & MYOB QuizSETUP AND TRAINING

QUIZ: MYOB Online Training Skills Test

SETP 9: Creating MYOB set of business transactions, recording these in MYOB and producing a set of financial statement from MYOB

Select Harvest is an almond nuts company. They farm their own nuts and manufacture and sell the almond nuts. In this assignment I am focusing on my transaction on the wholesales of almond nuts and tried to show the real company transactions in the month of April 2018. When I read an instruction, I am kind of confused with 10 hypothetical business transaction and it seems much easier than my first thought. I had great an experience making my firm business transaction and Set up & training videos helps a lot to making my transactions.Transaction One: Date 01/05/2018

Select Harvest Company has ordered Doyle and vertical form filling machines at the manufacturer for a cost of $16,624.95 incl GST.

Transaction Two: Date 04/05/2018

Paid fortnightly waged for John. He worked 54 hours in two weeks on a salary of $66312pa

Transaction Three: Date 07/05/2018

Pay Doye Packing invoice $380

Transaction Four: Date 10/05/2018

Invoice for advertising cost $1,120 incl GST

Transaction Five: Date 11/05/2018

Sales invoice of wholesale of 400 almond nuts to Lucky. The invoice specifically fortnight payment term. The average selling price is $8.50 350G which is (8.50*400=$3400) incl GST

Transaction Six: Date 17/05/2018

Received direct deposit for Sunsol muesli $1800 of 300 nuts that Select Harvest Sale. So, each nut $6 of 500G (300*6=$1800) incl GST

Transaction Seven: Date 22/05/2018

Pay electricity bill $4600 incl GST.

Transaction Eight: Date 23/05/2018

Cash receipt almonds and currants of natural muesli $2100 incl GST from Allinga Farms.

Transaction Nine: Date 27/05/2018

Return 50 almond nuts of 350G – after Lucky bought 400 almond nuts, it did not meet the standard required for the nuts. Which is 350G almond nuts cost of $8.50 (8.50*50= $425) incl GST.

Transaction Ten: Date 30/05/2018

Paid the credit card fees of $50 has come through in the business account.

Step 10: Describing the firm’s depreciation policies and creating depreciation journal entries.

2017($)

2016($)

2015($)

Plant and Equipment

7,115 5,241 3,649

The annual report of Select Harvest of 2017 that the depreciation expense in case of their plant and equipment increased &7115 in the year 2017 as compared to the year 2016 that recorded to $5241 and then in 2015 its recorded to $3649. This record shows the depreciation charge might rise in the year of 2018 as an average capital spending will equal the depreciation charge. According to the annual report of Select Harvest “the depreciation amount of all fixed assets is including the building and capitalised leased assets, but its excluding the free hold land water that depreciated in a straight-line basis over their estimated useful lives to be commencing from the time asset that ready to use. Depreciated Improvements of leasehold is over the short of either the unexpired period of the useful live. The useful lives for each class of assets are:

Buildings: 25 to 40 years

Leasehold improvements: 5 to 40 years

Plant and equipment: 5 to 20 years

Leased plant and equipment: 5 to 10 years

Bearer plants 10 to 30 years

Irrigation systems: 10 to 40 years’

In additional, the financial statements explain about different depreciation charges of the total asset of the company. My company of Select Harvest has applied straight line procedure to order the revalued costs. This company charges the depreciation procedure between last three years of increasing depreciation rate in 2017, 2016 and 2015. Depreciation is the

significant of expense that is facilitates the company in the tracking their fixed assets.

Step 11: Feedback