BA214/BA216 (Corporate Accounts/Financial Accounting 2)

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Group Assignment

BA214/BA216 (Corporate Accounts/Financial Accounting 2)

2022

Attentions:

1. The due date of submission answers is on 14^th March 2021 (Monday) before 6p.m. in LMS CN Dropbox. LATE submission will be penalized. The penalty is calculated as follows:

· 1 day (including submit after 6p.m on the due date) = 5 marks

· 2 days = 10 marks

· 3 days and above = 0 mark

2. Answers’ given must be typed. Font: Times New Roman (12).

3. Four (2) to five (3) members in a group. A group member must be in the same code/program.

4. Plagiarism is prohibited. If your answer is found plagiarized, you will be awarded zero (0).

Question 1

Lindsay, Donny and Henry who are forming a partnership to operate an antiques gallery, are discussing how income and losses should be distributed. Among the facts they are considering are the following:

a) Lindsay will contribute cash for operations of RM100,000, Donny will contribute a collection of antiques that is valued at RM300,000 and Henry will not contribute any assets.

b) Lindsay and Henry will handle day-to-day business operations. Henry will work full-time and Lindsay will devote about half-time to the partnership. Donny will not devote time to day-to-day operations. A full-time clerk in retail store would make about RM20,000 in a year and a full time manager would receive about RM30,000.

c) The current interest rates on long-term loan is 8%

Lindsay, Donny and Henry have just hired you as the partnership’s accountant. Write a memorandum describing an equitable plan distributing income and losses. Outline the reasons why you believe this plan is equitable. According to your plan, which partner will gain the most if the partnership is very profitable, and which will lose the most if the partnership has large losses?

(20 marks)

Question 2

Select a public corporation (food and beverage industry) which interests you. Using the internet or other sources, develop a short profile of the corporation. Include in your profile the following information:

1. Name of the corporation

2. State of incorporation

3. Nature of its operations

4. Total assets for the most recent statement of financial position

5. Total revenues for the most recent statement of comprehensive income

6. Net profit for the most recent statement of comprehensive income

7. Classes of shares outstanding

8. Market price for the shares outstanding (31/12/2020)

9. High and low price of the stock for the past year.

10. Dividends paid for each share of stock during the past year.

(10 marks)

           TOTAL: 30 MARKS