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Kim Temple
ACCT11081
Introductory Financial Accounting
Assignment – Step 7-10
Step 7
Embarking on Step 7, I diligently began watching the short videos to gain further understanding of
inventories. Being something of a visual person and given these were quite short videos, I felt they
gave me a brief enough understanding to pique my curious nature. Enough for me to want more,
not enough to bore me. So off I went. Initially I went through my 3 annual reports and conducted
word searches. I was initially surprised by how many pages contained either the word inventory or
inventories. I have read these reports perhaps a couple of times and have never really paid much
thought to how much a word appears.
I knew my company, Headlam Group plc would contain substantial inventory given the work and
understanding of the initial parts of the assignment. Being Europes largest distributor of
floorcoverings would certainly result in having a substantial inventory and I am a quite looking
forward to uncovering the ways in which they manage and measure the inventory.
On the first page of the guide, it stated Dell Computers had zero inventory and only purchased the
parts when the order was received and I knew immediately this was certainly not the case for
Headlam as I recalled watching the video where the new distribution centre was built housing
possibly hundreds of thousands of metres of floorcovering. This also got me thinking about the
differences between assets and inventory. Where they the same, or different? Was the carpet
being purchased an asset or inventory item or where they the same? And were the delivery trucks
considered an inventory item or an asset? So many question… so much reading!
Starting at 2015, I was shocked to see the inventory value being a staggering £119.6m up from
£116.59m from 2014. I then went to my Cost of Sales in the Income Statement and it showed
£453.4m. Suddenly, it seemed in context and I began to think about the actual turnover of the
business. I compared it to the example in the study guide. Wesfarmers has $6.5b inventory and
sales of $49.1b which is 8 times greater, whereas Headlam is only 3 times the amount. But
comparing these two items is like comparing apples with pears. Headlam Groups sole business is
floor covering where Wesfarmers is a much more diverse industry. This then got me considering
the construction company I work for and if we would hold an inventory. The project I am currently
working on is building a pipeline from the Murray River to Broken Hill. Whilst we require a lot of
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items to build the said pipeline and the facilities associated with it, similar to Dell, we purchase the
items as required either through suppliers or subcontractors.
On reviewing Headlams inventory for each year there is a distinctive upward trend, which is positive.
More interesting however was in 2016, the format of the annual report had changed, displaying
much more detail with restated values dating back to 2014. I recall from Acct11059 that this often
happens once the actuals are realised. The actual inventory value for 2014 (£115.5) and 2015
(£118.1) were both showing different numbers. When considering the reason this may be, I recalled
from reading the original annual report from 2015, repeated throughout the document in regard,
“…..Inventory is held across a broad and diverse product range which is subject to a risk that changes
in consumer tastes and demand resulting in some inventory lines becoming slow-moving or
obsolete, such that the recoverable amount is less than the carrying value.” With this in mind, it
makes sense that the values would be restated given the unknown value of these older ranges being
sold. With several acquisitions happening over the 3 year period, it seems only natural the inventory
value would continue to grow, reaching £131.5m in 2017.
Headlam Group have declared in their annual report under ‘Notes to the Financial Statement’ they
operate under the FIFO principle, meaning their cost is based on the first-in first-out principle. It was
noted in the 2017 report as an improvement item that the reordering system to be moved from
manual to a computerised algorithm leading me to conclude the company had adapted the
perpetual method of accounting for the cost of goods rather than conducting an annual stocktake
(period). This method was further concluded given the volume of inventory. Headlam did not advise
of any write downs within the annual report. A thorough search of the most recent report found no
reference to either theft or wastage which I felt was neither a good or bad thing. It is not good as it
may not be being reported, or it is not bad as the company is able to account for all the inventory
with no theft nor wastage to note which again leads back to the introduction of a computerised
recording system.
Headlam states they have over 22,000 units and pride themselves on an extensive and rapid delivery
network and the consideration this is reordered manually while staying ahead of flooring market
trends in Europe is quite impressive. The company has also stated they are eagerly awaiting the
2018 results due to the introduction of stock reordering trials and from other initiatives regarding
the delivery fleet.
It is also often noted through the annual report there are associated costs with the inventory and
these are to be expected given the company is a distribution company with 63 subsidiaries. The
annual report has stated it includes the acquisition of the inventories and bringing them to their
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existing location and condition. It also includes all estimated costs of completion and costs to be
incurred in marketing, selling and distribution.
As mentioned in the annual report, the introduction of a computerised ordering system with
perhaps the introduction of the serial numbers, this would be of huge benefit and further support
the assumption the perpetual method is used for recording inventory.
I recall many years ago working for a labour hire agency and attending some stocktakes of some
plant companies. They were conducted each weekend and we were all armed with printouts of
items in each of the rows with the part number and the number of items held in stock. I can still
vividly recall counting hundreds of small nuts, bolts and screws which had been tipped out of boxes.
Sometimes the items were within close range, sometimes there were no items at all and sometimes
there were part numbers not recorded and many items. I had initially concluded the company was
preferring to use the periodic method however I feel now they were possibly utilising a perpetual
method, given we had data reference sheets and were undertaking a stocktake to assess if it was to
assess if there were to be any ‘write-downs’ for the period. In hindsight, this has given me a much
clearer visual of an inventory and how it can be accounted.
When receiving feedback from my peers, it was suggested, and also noted once I reviewed the
assessment notes again, inventory turnover ratio would be a good way to identify ways Headlam
could improve its inventory management.
000's 2014 2015 2016 2017Cost of Goods $ 444,702 $ 453,567 $ 481,068 $ 487,683 Beginning Inventory $ 115,591 $ 118,165 $ 126,037 End Inventory $ 115,591 $ 118,165 $ 126,037 $ 131,566 Inventory Turnover Ratio 0.26 0.25 0.26Inventory Turnover Days 1416 1438 1382
Based on the results identified, Headlams turnover is not what I expected at all however it has
helped understand the business and put it into clearer perspective. It is showing an improvement in
the time in inventory is in stock however I can now fully understand the need for such big
distribution centres. To improve the inventory management, the introduction of the algorithm
ordering system will assist with reordering those items of low stock and also assist with recognising
slow moving stock and if there is actually a need to reorder.
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Step 8
I found the concept of my Step 8 challenging and confusing. Initially I had difficulty obtaining
permission to download the program to enable me to complete this step and believed I may have
been required to forfeit the marks. A colleague came to my rescue (I believe she may have muttered
the words ‘not all superhero’s wear capes’) and I was off and running…. Or so I thought.
I found I was a little lost in relation to what was required in this section and it wasn’t through a lack
of trying nor understanding. I wasn’t sure when to stop and what was enough and even though we
were asked to take screen shots, I was even more confused about what I was actually taking a screen
shot of. I also read Marias comment about seeing what was opened and what we were working on
but I wasn’t sure at which point. I can only assume it was the point before I uploaded. With the set
up I found myself becoming snap happy as I entered my company details and there entered and
performed quotes but then wondered if I had surpassed the set up and was now in training.
AAAAAARRRRRRGGGGGGHHHHH!!!!!
Therefore I have screen shotted many, many screens. I felt this was simply because I am someone
who likes structure, with a specific end game. In this circumstance, the uncertainty of what that end
game was had me overthinking quite a bit and struggling to find an off button or conclusion. After I
had completed this and began receiving feedback, I feel I may not have completely understood what
was required and followed the screenshot example of my peers.
Initial Set Up of Company
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New Company Set up for Reports
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Online Training
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Results from Online Test
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Step 9
Business Transactions for Headlam
No. Transaction Details Value
1 Phone Connections/IT
Action - Calling ‘Lifestyle-floors’ to place an
order for some on-trend luxury vinyl tiles.
(Pay Telstra)
$1,500 per month
2 Bulk Purchase of Item – 300sqm
Action - Purchasing sqm of on-trend luxury
tile for distribution through Headlam
including freight (Pay Supplier)
$4,500 – Bulk Purchase
3 Consumer online purchase of item – 5 sqm
Action - Purchase of luxury tile by
consumer in Ireland through one of the
distribution stores in Ireland (Receive
Customer Payment)
$225
4 Delivery Charge for online purchase
(Receive Customer Payment)
$75.00 for order
5 Lease of Delivery Van 01-08-18 to 31-08-18
Action – Delivery van to transport items
from suppliers, from Headlam distribution
centre and to customers, full day charge -
delivery of additional 15 product lines to
consumers in area (Pay Supplier)
$30.00 per day
6 Fuel Consumption 01-07-18 to 31-07-18
Action – Fuel for delivery of items for
month of July (Pay Supplier)
$65.00 per day
7 Wages -23-07-18 to 29-07-18
Action – Delivery Drivers, Sales Personnel,
AP, AR – Combined (Pay Wages)
$87.50 per hour
8 Installation
Action - Installation costs of luxury tile for
consumer in Ireland to Customer (Receive
Customer Payment)
$50.00 per item
9 Subcontractor Invoice $35.00 per item
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Action – Invoice from subcontractor for
installation of goods (Received Invoice
Supplier)
10 Subcontractor Payment
Action – Payment to subcontractor for
installation of goods (Pay Supplier)
$35.00 per item
When initially entering these transactions, they seemed quite logical however the amount of time
and effort put into processing each and every one of them is not reflected in the reports produced.
Each individual transaction was much more than a single line item, satisfying the requirement to
understand how each transaction forms a much bigger part in capturing transactions.
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ID No. Account No. Account Name Debit Credit Job No.SJ 10/09/2018 Jane, Bardon
00000002 1-1310 Trade Debtors $322.5000000002 4-1000 Sales Income #1 $225.0000000002 4-6000 Freight Income $68.1800000002 2-1210 GST Collected $29.3200000002 1-1110 Headlam Group plc $78.0000000002 5-1000 Cost Of Sales $78.00
CD 15/09/2018 Lifestyle-floors Pty Ltd2 1-1110 Headlam Group plc $4,500.002 1-1330 Deposits To Suppliers $4,500.00
PJ 17/09/2018 Purchase; Delivery Vans R Us00000004 2-1510 Trade Creditors $930.0000000004 1-3010 Leased Equipment At Cost $845.4500000004 2-1220 GST Paid $84.55
PJ 22/09/2018 Purchase; Lifestyle-floors Pty Ltd00000002 2-1530 A/P Accrual - Inventory $4,090.9100000002 1-1110 Headlam Group plc $4,090.91
CD 22/09/2018 Telstra Australia Pty Ltd1 1-1110 Headlam Group plc $1,500.001 6-2000 Telephone Expenses $1,363.641 2-1220 GST Paid $136.36
CD 22/09/2018 Telstra Australia Pty Ltd1 1-1220 Electronic Clearing Account $1,500.001 6-2000 Telephone Expenses $1,363.641 2-1220 GST Paid $136.36
CD 22/09/2018 Delivery Vans R Us2 1-1220 Electronic Clearing Account $930.002 2-1510 Trade Creditors $930.00
CD 22/09/2018 Fiona, Smith3 1-1220 Electronic Clearing Account $3,937.503 6-4100 Wages & Salaries Expenses $3,937.50
CD 22/09/2018 Jodie, Brown4 1-1220 Electronic Clearing Account $3,937.504 6-4100 Wages & Salaries Expenses $3,937.50
CD 22/09/2018 Peter, Jones5 1-1220 Electronic Clearing Account $3,937.505 6-4100 Wages & Salaries Expenses $3,937.50
CD 22/09/2018 We Lay It Right6 1-1220 Electronic Clearing Account $35.006 2-1510 Trade Creditors $35.00
CR 22/09/2018 Jane, BardonCR000001 1-1210 Undeposited Funds Account $322.50CR000001 1-1310 Trade Debtors $322.50
CR 22/09/2018 Jane, BardonCR000002 1-1210 Undeposited Funds Account $50.00CR000002 2-1520 Customer Deposits $50.00
Grand Total: $26,071.41 $26,071.41
1/09/2018 To 22/09/2018
Headlam Business
All Journals
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AssetsCurrent AssetsBank AccountsHeadlam Group plc $358,012.91Total Bank Accounts $358,012.91Clearing AccountsUndeposited Funds Account $2,872.50Electronic Clearing Account ($12,477.50)Total Clearing Accounts ($9,605.00)Other Current AssetsInventory $540,000.00Deposits To Suppliers $73,500.00Voluntary Withholding Credits $4,500.00Total Other Current Assets $618,000.00Total Current Assets $966,407.91Non-Current AssetsPlant & EquipmentPlant & Equipment At Cost $92,000.00Accum. Depr. Plant & Equipment $6,700.00Total Plant & Equipment $98,700.00FurnitureFurniture At Cost $7,800.00Accum. Depr. Furniture $1,300.00Total Furniture $9,100.00Office EquipmentOffice Equipment At Cost $35,000.00Accum. Depr. Office Equipment $4,500.00Total Office Equipment $39,500.00ComputersComputers At Cost $5,600.00Accum. Depr. Computers $2,400.00Total Computers $8,000.00Motor VehiclesMotor Vehicles #1 At Cost $45,000.00Accum. Depr. Motor Vehicles #1 $4,500.00Motor Vehicles #2 At Cost $65,000.00Accum. Depr. Motor Vehicles #2 $6,500.00Total Motor Vehicles $121,000.00BuildingsBuildings At Cost $475,000.00Accum. Depr. Buildings $15,000.00Total Buildings $490,000.00Warehouse EquipmentWarehouse Equipment At Cost $94,000.00Accum. Depr. Warehouse Equip. $7,500.00Total Warehouse Equipment $101,500.00ImprovementsImprovements At Cost $42,500.00Accum. Depr. Improvements $1,500.00Total Improvements $44,000.00Leased EquipmentLeased Equipment At Cost $9,745.45Accum. Depr. Leased Equipment $1,299.00Total Leased Equipment $11,044.45
As of 22/09/2018
Headlam Business
Balance Sheet
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Total Non-Current Assets $922,844.45Total Assets $1,889,252.36LiabilitiesCurrent LiabilitiesCredit CardsVisa #1 $10,000.00Visa #2 $10,000.00Total Credit Cards $20,000.00GST LiabilitiesGST Collected $4,529.32GST Paid $1,214.37Total GST Liabilities $5,743.69Other Tax/Withholding Liab.Voluntary Withholdings Payable $430.00ABN Withholdings Payable $4,500.00Company Tax Instal. Payable $230.00Fuel Tax Credits Payable $8,900.00Sales Tax Payable $2,500.00Total Other Tax/Withholding Liab. $16,560.00Payroll LiabilitiesPAYG Withholding Payable $46,722.00Superannuation Fund #1 $53,559.00Total Payroll Liabilities $100,281.00Other Current LiabilitiesTrade Creditors $176,515.00Customer Deposits $45,750.00A/P Accrual - Inventory $91,090.91Lease On Equipment $45,000.00Total Other Current Liabilities $358,355.91Total Current Liabilities $500,940.60Non-Current LiabilitiesBusiness Loan #1 $864,500.00Total Non-Current Liabilities $864,500.00Total Liabilities $1,365,440.60Net Assets $523,811.76EquityOwner's/Shareholder's Capital $540,000.00Current Year Earnings ($16,188.24)Total Equity $523,811.76
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Headlam Business
Statement of Cash Flow1/09/2018 To 22/09/2018
Account Name
Cash Flow from Operating Activities Net Income ($14,324.60) Deposits To Suppliers ($4,500.00) GST Collected $29.32 GST Paid ($357.27) Trade Creditors ($35.00) Customer Deposits $50.00 A/P Accrual - Inventory $4,090.91 Net Cash Flow from Operating Activities -$15,046.64Cash Flow from Investing Activities Leased Equipment At Cost ($845.45) Net Cash Flow from Investing Activities -$845.45Cash Flow from Financing Activities Net Cash Flow from Financing Activities $0.00Net Increase/Decrease for the period -$15,892.09Cash at the Beginning of the period $364,300.00Cash at the End of the period $348,407.91
When initially analysing, I regret doing 2 things. Firstly, I wondered why I would have entered so
much fabricated information putting little thought into how I wanted to present my company which
would have made my analysis a much easier process and the second was why I created so many
different transactions when I could have applied more straightforward transactions. We reap what
we sow so onward onwards and upwards….
When I was processing payments in MYOB especially as there were so many layers from creating the
card, to creating the quote, transferring to the order and then processing the payments, I found it
confusing as I understood and knew the process as these are items conducted each day in my
current role, however entering the information into a new, unfamiliar system, I found at times I was
a little out of my depth. I believe this to be reflected in the All Journal. When I first printed it and
saw within there were items which appeared to be incorrectly processed, my initial instinct was to
amend them so my work could be presented perfectly, however I decided against it as I felt it told a
more interesting story.
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The information I entered is indeed reflective of what has been produced. It helped to further
appreciate the double entry book keeping concept and in consideration of it being used daily, it
would be easy for a business to keep track of the daily transactions as they occur to product the
business reality of the company. The All Journal was perfect as it showed the daily transactions. The
Balance Sheet was perfect to show the ledger with all the different accounts like the assets, liability
and equity in my business.
I again started to regret creating so many subsidiary accounts rather than just focusing on a general
ledger and again reminded myself this was to fully engage with what I was learning.
and Cashflow statement is only for period to date in September. With the initial outlay of a product,
it is interesting to see all the other costs for one product. With Headlam, to purchase a luxury
floorcovering and then to also add a high mark up, there was still a lot of additional costs to consider
rather than the straight forward distribution of floor coverings.
My initial thoughts were of a company that appeared to be well established with a solid amount of
assets compared to the liability. I also found, while I was looking at my statements, Ifelt I needed
more information and realised the benefit of comparison when reviewing the las 3 years annual
reports to really gain a full understanding of movements within the company. It wasn’t until
undertaking this exercise I fully appreciated the value of assessing consecutive years.
The current ratio between the assets and liability is quite stable at 1.93. However, it is showing a
minus for income which, regardless of the size of a business, would not be a good indicator of a
forecast profit (and I don’t feel I need a ratio for that). The relevance of entering the information in
and having that personal connection to it and then seeing it reproduced and used to reflect what is
happening within the company has become more ‘real’. Based on the current transactions, the
revenue has decreased.
The balance sheet is also identifying the perpetual method of recording the inventory is being used.
While I did look for this in the balance sheet, I was not surprised as I recall entering the information
to build the inventory and checking the box to state I wanted it included.
With the statement of cashflow, in a more realistic environment, there would have been more than
one customer which would reflect the decrease for the period. It was a good indication for where
the revenue was coming from and where it was going to be distributed in a quite simplified version.
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Regarding the discussion for the Journals, I had opted to use the ‘or MYOB help’ functions regarding
the All Journal report as I have not been successful in making any connections with others from the
group, either on facebook or through personally messaging them. While I do not feel this has
hindered my study, I have felt more reserved than normal to interact online or to even reach out to
my peers. Like other aspects of my life which seem clearer since beginning university, the statement
‘the silence is deafening’ has much more profound meaning than ever.
MYOB is the same but different to the accounting system my workplace currently use.
Predominately, I am responsible for entering information in, mainly in relation to purchase orders,
invoices, contracts only for accounts payable. I also assist with preparing end of month forecasting
values through estimating and entering accruals. I find using MYOB, my mind is unable to
differentiate between the two, possibly taking me longer than normal to complete. I have spoken to
our Project Cost Reporting (PCR) Team and been advised the program is loosely based on MYOB so I
am sure, if I was to continue to use on a regular basis it would become much more familiar to me. I
did find, the more I used the programme, the more information I could see, especially in the reports.
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Step 10
When initially reviewing the Property Plant and Equipment, I assumed it was going to be a
straightforward exercise. I mean, how hard or confusing can it be. I watched the videos from Week
8, took notes and then when I watched the videos linked to the assessment, I had assumed I was all
over this as my notes were the same as Martins highlight reels. I had made a note regarding the
confusion in what people think is depreciation (a decline in value) to what it actually is, being items
that wear out and no longer providing economic benefit. However, as I have discovered,
depreciation is a much more complex issue and it required a great deal of understanding and
concentration on my behalf.
Headlam Group were quite consistent with the approach of calculating depreciation with easy to
understand table showing the same percentages for all 3 years running.
Asset type Tax depreciation rate %
Freehold and Long Leasehold Properties 2
Short leasehold properties Period of Lease
Motor vehicles 25
Office and computer equipment 10 - 33
Warehouse and production equipment 10 - 20
Land is not depreciated
As depreciation rates are often provided through the Government, I was interested to see the rates
indicated in the UK however found the following for Ireland which was noted in the accounting
practices within the notes. Price Waterhouse Cooper identified Ireland operates an eight year tax
depreciation life on most assets as follows;
On further examination of the United Kingdoms depreciation rate, it was interesting to note when
searching
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Headlam has many accounting policies and they cover a broad range of items regarding
depreciation. These refer to property, plant and equipment and how these are recorded, the rates
which are being applied and investment properties with listed annual rates also being applied.
“Property, plant and equipment are stated at cost less accumulated depreciation and impairment
losses. The cost of self-constructed assets includes the cost of materials, direct labour and any other
costs directly attributable to bringing the asset to a working condition for its intended use. Self-
constructed assets begin to be depreciated from the date they become available for use.”
The choice not to have the amortisation and information listed is indeed a strategic one as it does
contain a footnote advising the company is taking advantage of the exemption in s408 of the
Companies Act 2006 not to present its individual income statement and then provides the profit
vale.
Profit before Tax
2017 2016 2015 2014
Depreciation
on property
plant and
equipment
4914
5276
Amortisation
of intangible
assets
931 0
In 2017, the value of the Non-Current assets is showing as £146.9m, inclusive of property plant and
equipment, intangible assets and deferred tax assets. A non-current asset is an item intended to be
used for many years and the depreciation value is calculated determining what the original cost is
and identifying a percentage of the declining value for the period.
Headlam Group were quite consistent with the approach of calculating depreciation with easy to
understand table showing the same percentages for all 3 years running. And to be honest, there
didn’t seem to be a great deal of movement.
Headlam Group has used the straight-line method for depreciation over the last 3 annual reports.
This is the method where the carrying amount is gradually reduced for the life of the asset.
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Note - KT – Describe the other types of methods and include
Depreciation is a significant cost for Headlam as property, plant and equipment is stated at cost less
accumulated depreciation and impairment losses. These could be considered a significant loss given
the company purchases and sells its own facilities. The depreciation, amortisation and impairment
value in 2014 was £4.9m and this grew to £5.8m in 2017. When recording these figures, I was
completely confused… Why was my Statement of Financial Position showing a different value? It
was time for me to take a step back and start again.
The following are possible journal entries of transactions for Headlam. The values are based on the
annual applicable rates.
Property, Plant or
Equipment
Cost (£) Depreciation (£) Debit (£) Credit (£)
Depreciation Expense –
Motor Vehicles
25,000 6,250 (25%) 6250
Accumulated
Depreciation - Motor
Vehicles
6250
Depreciation Account 95,000 9,500 (10%) Debit
Long Reach Forklift
(Warehouse
Equipment)
9,500 Credit
Depreciation Account 2,999 999.66 (33.3%) Debit
Multifunction Centre
(Office Equipment)
999.66 Credit
As amortisation is an intanglible asset, the company would be able to use their own value on an item
based on market value or fair price. If the item is something that is not physical, it would be much
more difficult to measure. As Headlam use straight-line for depreciation, this allows them to claim
the same value over the life of the products. Therefore even as the items is reducing in actual value
in resale, Headlam is still able to continue claiming the same amount for consecutive years. This is
obviously advantageous and not always entirely reflective of the current item.
Notes – KT
What effect would these journal entries have on my firms financial statements.
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Step 11
This, as always, is the section where I believed my learning really starts. While I do not provide as
much feedback as I review, I find each individual has a unique approach at relaying information.
Some assessments, I can completely relate to, where other times, I can get a little lost. I find a huge
amount of value in this step and go back and review the information I have completed in the hope of
achieving a couple of extra marks based on the feedback I have received.
Feedback To: Jacqui Watts
My Comments
Step 7Inventories
I found it interesting China Ting inventory included labour. Interesting enough that it has made me questioning what I thought I knew about inventories. I had a mindset of
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inventories covering only materials where China Ting seems to have included the ‘whole’ of the price in the final goods. Your breakdown was interesting especially in 2016 where the raw materials work in progress was lower than previous years however the finished goods were higher. Your analysis is very well thought out and thorough. I can not see any items you have not covered in your Step 7.
Step 8MYOB set upMYOB trainingMYOB quiz
CompletedCompletedCompleted
It would appear there is sufficient evidence to show you have completed the training
Step 9Business transactionsAll Journals reportFinancials and discussion
After reading your transaction and interpretations, I feel you have selected relevant transactions to generate the necessary reports.
Step 10Depreciation
The breakdown and information contained within the depreciation section is similar to the rest of your assignment, both detailed and thorough.
Overall The way you approach each of the steps is very considered and thorough. You ensure the reader understands the topic you are discussing and provides enough information to assist with the interpretation of the report. Interestingly, I wondered how I would feel reading our peer reports given I thought mine was boring and uninteresting however I found myself reading each page carefully and feel I too have gained a much greater appreciating for your company China Ting. The time and effort you have spent preparing and ensuring you understand and complete the topic is recognised in the completeness of your assessment.
Good luck with your studies Jacqui. You have assisted me with my own studies more that you realise. With many thanks
To: Rahul Singh
My Comments
Step 7Inventories
You have structured your step 7 in an easy to understand format. The Days in Inventory was certainly interesting as I recalled doing this the previous unit and it assists with understanding the company better. The detail provided is quire impressive.
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Step 8MYOB set upMYOB trainingMYOB quiz
CompletedCompletedCompleted
I seem to have accessed the training from a different field which doesn’t show the format as in the one you pasted. It all makes much more sense now on what was to be provided
Step 9Business transactionsAll Journals reportFinancials and discussion
Like you, I have included wages in the transactions so it has been interesting to be able to compare and know what to expect. Reviewing your analysis of the transactions it was refreshing to be again transported back to ACCT11093 with the financial ratios used. It shows great consideration and solid foundations for the information being presented.
Step 10Depreciation
You have answered again in a structured format, addressing all the items in the assessment.
Overall Possibly the only real constructive feedback I could give Rahul is that I would have loved to have seen your interpretation of some of the items. Your interpretation of these items, like an introduction to the reader of the topic, in your own words, in a more generalised format to further engage the reader.
You have presented a very detailed and thorough report addressing all the necessary criteria. I really enjoyed how you have incorporated the ratios into your paper as it really does portray a much larger picture.
Your knowledge of each of the items are evident and you have again, made me go back and assess my own to provide a higher level of information.
Great work Rahul. For someone so young, you certainly have a real strength in the information provided.
Feedback Received
Feedback From: Jacqui Watts
Feedback To: Kim Temple
My Comments
Step 7 This is well done, and you have covered lots of really
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Inventories interesting points about your firm, and your experiences.
Step 8MYOB set upMYOB trainingMYOB quiz
Like you, this step left me a little confused as to what to do, especially since the link to the training in the assignment guide didn’t work for me. I figured it probably didn’t matter as long as we showed an understanding of using MYOB, and you appear to have done this well by creating your own business account and getting 100% on the quiz. Well-done!
Step 9Business transactionsAll Journals reportFinancials and discussion
Business transactions look very good and should come out well when you do your journal report and financials. I only added purchases and sales in mine, which made for boring financials and your transactions have given me some ideas on how to do mine better.
Step 10Depreciation
You have made some good comments and raised interesting questions about your depreciation.With your journal entries, after watching Tutorial 8 (Mackay) from Week 8 I took it to mean that we choose some entries that were included in the notes to the financial statements. I notice others are getting confused with the XXXX numbers Step 10 suggests using. I took this to mean the journal numbers rather than the depreciation figures, but I’m not 100% sure. However, like MYOB I think as long as we show we understand the concepts it is all good. Also, add the word accumulated depreciation to your credit entry (contra-asset account). I used MYOB, for some more practice for the journal entries, as it created the journal for you, once you entered the depreciation accounts (Depreciation expense account, Individual accumulated depreciation contra-assets account for items of PPE).
Overall A great start, with just a few questions and parts left to answer. You have shown your developing understanding of the concepts well as you have studied the annual reports.
Feedback From: Rahul Singh
Feedback To: Kim Temple
My Comments
Step 7Inventories
1. You need to confirm which inventory system is being followed – if the firm follows the Periodic system it will record Purchases and Changes in Inventory rather records COGS in the Income Statement, but will record COGS if it follows the Perpetual System
2. An increase in inventories is not necessarily a positive
Kim Temple Page 29 of 30
sign. Ratios of Days of Inventory and Inventory Turnover ratio are indicators of good inventory management and comment on the trend for Hedlam and possible causes of the trend.
Step 8MYOB set upMYOB trainingMYOB quiz
1. While you may have gone through the entire MYOB training, you may like to provide evidence of about 15-odd modules of training
2. Perhaps you would like to show setting up your company with 10-15 transactions across a variety of assets, liabilities, Equity etc
Step 9Business transactionsAll Journals reportFinancials and discussion
1. You still need to enter the 10 journal entries into MYOB then generate the all journals report and the 3 financial statements. And finally comment on the financial statement implications.
Step 10Depreciation
1. “Headlam doesn’t have accumulated depreciation and amortisation listed in the income statement as a major expense account….” Accumulated Depreciation is a contra-asset and is a balance sheet item, not an Income Statement item. Not sure if you are getting confused with depreciation expense and accumulated depreciation.
2. On pg12 you mention depreciation, amortization and impairment expense does not match with the numbers in the Statement of Financial Position – it will not. The former is an income statement item (an expense for the year) and the number on the Balance Sheet will relate to Accumulated Depreciation (the sum total of all the depreciation of the previous years)
Overall You seem to know the issues, so I’m sure you’ll get there!
Kim Temple Page 30 of 30
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