REFLECTIVE ESSAY
Basic Accounting was fun and interesting module to go through in lecture and tutorial classes. The syllabus flowed very well and our lecturer taught us step by step from 'What is Accounting' to 'Balance Day Adjustment' and 'Financial Ratio'. He also made it easy for us by having role play as example.
Topic that I have passion knowing it more deep is Profit & Loss Statement or generally known as P&L Statement. This statement is a report which record whether business has generating profit or loss during accounting period. It interests me the most because from this statement I can know whether a business is profiting or losing. Besides that, I am also interested in Financial Ratio Analysis where I can figure out the problem why the business is profiting or losing. Financial Ratio Analysis also show that how well a business control their production, loans and inventories (stocks).
The topic which I feel useful right now and in the future is Ledger Recording and Balance Sheet because these two topics are the most basic in accounting. Thus by having the knowledge of recording daily transaction, I can record my online business transaction everyday then by the end of financial period, I can know if my account is balance or not. Besides that, balancing the account is also important to check how much amount of money is still left in the account.
Lastly, I would recommend my juniors to take Basic Accounting in future because it does help a lot in future as a general knowledge.
[256 words]
PICTURES
This is one of my group mate during the first class of Basic Accounting.
The image above shows the answer to a few questions on what we thought about accounting.
a) Who are customers?
b) What is the function of financial report?
c) Give an example on why a customer needs to read a business financial report?
TUTORIAL EXERCISES
Break-Even Analysis Exercise
1.
Diana is considering setting up an Italian cake shop. The cost of making an
Italian cake is $12 each and they are sold at $28 each. In addition, Diana also
has other monthly expenses as well: rent ($500), electricity ($240) and wages
($700).
How
many Italian cakes must Diana sell in every month to just cover all her
expenses?
90 cakes.
2.
Thomas is planning to start his own pirated DVD shop. He will purchase his DVDs
from a supplier at a cost of $2.50 each and sell them for $12. His estimated
monthly costs include rent ($1000) and utilities ($200).
a)
What is the contribution per unit of DVD?
10 units
b)
Determine the break-even point for DVDs.
126 units
c)
How much sales revenue must Thomas make to
achieve break-even point?
1512 units
d)
If Thomas wants to achieve an annual profit of $24000, how
many DVDs must he sell each month?
337 units
e)
Thomas wants to provide each DVD with a
protective case at cost $0.50. If he does this, determine the annual sales unit to achieve his
annual profit.
4272 units
3.
Warren is considering on selling 1
of the 2 following products: Ipad 2 or Galaxy Tab. The cost and selling prices
for these 2 products are as follows:
New Ipad
|
Galaxy Tab
|
|
Selling Price
|
$1800
|
$1480
|
Cost Price
|
$1120
|
$970
|
Warren’s
business is expected to incur a monthly fixed cost of $40,000. He also intends
to make an annual profit of $600,000.
a) Based on the information given
above, calculate the units that Warren needs to sell to achieve his monthly profit, if:
i) he chose to sell the New Ipad
132 units
ii) he chose to sell the Galaxy Tab
176 units
b) Based on the answer from part (a),
which product do you think Warren should sell? Give your reason. What other
factors should you consider before deciding? Discuss.
New Ipad because he needs to sell lesser as compared to Galaxy Tab
4.
Jones Ltd. needs a specific component to make its products. The component could
either be produced internally for $15 per unit or purchased from a third party
for $20 per unit. At the moment, the business has spare
capacity.
What should Jones Ltd. do? Why?
Produce internally $15. It can earn more profit even the same things can sell for the same price
Accounting Exercise - Topic 2.1 : Ledger recording, P&L statement and Balance Sheet
Answer :
No comments:
Post a Comment