Michael Taylor S0252829

Michael Taylor

Student - S0252829

ACCT11059 USING ACCOUNTING FOR DECISION MAKING

ASSIGNMENT 2 RESTATED FINANCIAL STATEMENTS

DUE: 11.00am Monday 11 May 2015

Lecturer: Martin Turner

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KCQ’s

1. I really did think that this chapter was allot to take in. In fact I had to re-read

many things. I guess this is the learning process. Martin has put together a very

detailed and informative chapter. I feel after reading it and restating my financial

statements I have learned allot of concepts of accounting and so many new terms

it’s quite scary.

2. When Martin described capital markets as based on expectations rather than

reliable data and solid figures. This got me thinking of how much risk is involved

in buying into these markets if you don’t have any expectations at all of the

market. This made me think how do you try and predict the expectations of the

market and what variables contribute to these expectations? As I kept reading it’s

all about understanding the financial statements of the past to tell the future of a

firm.

3. After the first few paragraphs I am already beginning to feel overwhelmed. This is

my 6th subject at UNI so far and this chapter I am finding the most challenging by

far. I am thinking how can a procedure so confusing and time consuming be

completed in 5 minutes once I have done a few of them and be considered a

mechanical process. Feels like I am wandering all over the page trying to

understand.

4. Marchialli’s quote “whoever wishes to foresee the future must consult the past”

This must be the most informative quote I have ever read to use in any life

situation. Making decisions in general depend on your past experiences. I am

going to use this quote allot in my life from now on. And I find reading this

chapter has been worthwhile just because of this.

5. The free cash flow section was very helpful to me I have always wondered what

section of the financial statement analysts and investors use to determine if a

company is worthwhile investing equity in.

6. Martin’s explanation of capital really hit home with me. “The true cost of

everything we do in life is the alternative things we could have been doing with

our time and energy and resource” I can relate this statement with how I have

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decided to live my life. What I would rather be doing and working towards it,

hence why I have taken on UNI to start a lifetime of learning.

7. It seems a business has to keep in growth in order to satisfy investors. This got me

thinking. This is why a world is so busy and crazy and overpopulated. It’s all

about growth to keep investors happy. Is there any sustainable peak to which a

company can be happy and operate at? Or it this only firms who have not been

floated on the share market. Or do firms with equity investor require constant

growth.

8. The kinder surprise comparison to financial statements made me augh a little.

Was a great down to earth way to relate to me life. I do secretly love those things.

Secrets out.

9. The restating rollercoaster has been very scary to be and stressful. But as soon as I

came across the restated examples for Rymond health care I could visually see

how the statements had been restated and this helped me allot. I think I learn allot

with visual examples.

10. At the balance sheet section I am feeling stressed because nothing from my past it

popping up when I am reading it. Everything is so new to me and I am feeling

swayed by this.

11. When I read that thirty percent of Australian companies profit goes to tax. I

imagined how much tax must Coles or Wesfarmers pay in a year. This also got

me thinking about the recent news stories of companies such as Google keeping

their profits overseas and not in Australia due to the very high tax rate on profit. Is

Australia trying to grow too fast? And will the high tax rate hurt us in future

business in this country. If we want to expand our economy shouldn’t we be

lowering all these costs to invite the world into our country?

12. I have learned so many three letter acronyms in this chapter I even get them

mixed up now.

13. The only criticism with this chapter is feeling like I had to re-read allot of things

to make sense of it all. It is a very detailed chapter and allot to take in in one hit.

Include in your assignment (as a separate Word document) a brief commentary on any issues or concerns you had in restating your firm’s financial statements and the

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results of your discussions with other students. Also submit (online) your firm’s spreadsheet with your restated financial statements included.

Please allow about 520 – 600 minutes to complete Step 2.

Step 3: (4 marks)

Step 3 involves you identifying three products or services of your firm and estimating/guessing their selling price and variable cost. You will also comment on the contribution margins you calculate as well as identify constraints and briefly comment on them. Remember, do not spend too long on Step 3 (it is worth just 4 marks). If you have trouble easily identifying three specific products or services of your firm, then quickly make some assumptions about what specific products/services your firm might have. You will also likely need to guess the selling price and variable cost of each product/service. Try to make your assumptions reasonably realistic.

Identify three products or services of your firm. For each product or service of your firm, estimate (or guess) their selling price and variable cost and then calculate their contribution margin. See Section 6.4 in Chapter 6 of the Study Guide for guidance on what are variable costs and contribution margins. You might also like to see Section 8.2 in Chapter 8 of the Study Guide.

Discuss why the contribution margins for each of your firm’s three products/services might differ or be similar. Why might your firm produce a range of products/services with different contribution margins? Why not only produce the product/service with the highest contribution margin?

Many companies can face constraints on their capacity to produce products or services. For example, for Ryman Healthcare one constraint might include being able to find and purchase suitable sites for new retirement villages. As most people who go into retirement villages go into villages within 10 kilometres of their previous home, Ryman Healthcare needs to find large, level sites for retirement villages in suburban areas where there are a significant number of older people.

Identify (or guess) one or more resource constraints your firm may face, and also perhaps any market constraints you feel may impinge on your firm.

In what ways might these constraints be relevant when deciding whether or not (and how much) of the three products or services of your firm that you have identified, your firm should produce and sell?

Please submit your Step 3 as a Word document.

Please allow 100 - 120 minutes to complete Step 3.

There are two exemplars for ASS#2 from previous students in the course available in the Feedback box on the right hand side of Moodle. Check these out to give you some ideas about how you could approach your ASS#2. (Note: these previous students were asked to do five products/services in their ASS#2 – this year, you only need to do three).

Step 4: (3 marks)

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Step 4 involves you providing (and receiving) feedback to three other students in our course on their draft ASS#2. These will (usually) be the same three students you provided feedback to in ASS#1.

You will provide feedback to the same three students you previously provided feedback to in ASS#1. You can find the names of the three students you are to provide feedback to in the Student Feedback file in the top central panel of Moodle.

Most groups will have four people in them – you and the three other students to whom you will be giving feedback. Also, some groups may end up having more than four students in them. If you have more than four students in your group, you still only need to give feedback to three other students. This will mean some students in the group may receive feedback from less than three students. Also, in any group you may find that less than three students in your group actually give you feedback. Do not worry – the main benefit of Step 4 is in giving quality and thoughtful feedback to others in our course. The process of thinking about the feedback you give to others in our course will help you greatly with your own assignment as you think about what the assignment requires and how others have addressed these requirements for their own companies.

Prior to 5.00pm Friday 1 May (Week 7), please:

post draft work of your ASS#2 on your blog;

email a link to your blog to the students you have been matched with to provide/receive feedback and, if you wish, with specific areas where you would particularly value feedback. You can usually find the email address of people in our course by clicking on Participants in the People box on the right hand side of Moodle; and

provide a link to your blog on the Blog Links Forum (which you should already have done as part of your ASS#1) and post in the Blog Links forum a comment that your draft ASS#2 is ready for student feedback and, if you wish, specific areas where you would particularly value feedback for your ASS#2.

Prior to 5.00pm Thursday 7 May (Week 8), please ensure you have provided quality feedback to the three students you have been asked to give feedback to.

Include the feedback you have given to the three students in the course in your ASS#2. If you wish, you can include and/or comment on other feedback you may have provided other people in our course on their ASS#2.

Also, comment in your ASS#2 whether or not you found feedback from other students useful and why this was the case. You can include in your discussion both how useful (or not) you found feedback from the other three students asked to provide you with feedback and also any feedback you may have received from other students in the course through your interactions with them f2f, on discussion forums, Facebook and through other means.

Please allow 120 - 150 minutes to complete Step 4.

NOTE: For your ASS#2, please submit one (1) Word document (including your Steps 1, 2, 3 and 4) and also an Excel file of your firm’s spreadsheet with your restated financial statements included.

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Grades will be allocated to Assignment Stage 2 (ASS#2) as follows:

Mark Your Mark

Step 1

Key Concepts & Questions (KCQs) 5

Step 2

Restated Statement of Changes in Equity 2

Restated Balance Sheet 5

Restated Income Statement 8

Commentary and discussion with others 3

Step 3

Identify three products or services of your firm 1

Estimate selling price, variable cost & CM 1

Commentary – contribution margins 1

Constraints – identify & commentary 1

Step 4

Individual feedback with other students 3

TOTAL 30

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PEER FEEDBACK SHEET: ASS#2

Feedback From:

Feedback To: .

My Comments

Step 1 KCQs

Step 2 Restated Statement of Changes in Equity

Balance Sheet

Income Statement

Commentary and discussion with others

(Note: You may wish to give some comments on their Excel spreadsheet)

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Step 3Identify three products/services

Estimate selling price, variable cost & CMs

Commentary – CMs

Constraints – identify and commentary

Overall ASS#2

Note: Please simply use this sheet as a guide. You can provide your feedback to other students in whatever format you wish. There is no need to provide feedback on each step of ASS#2. For example, the person may have little or no

draft work completed for one or more of the steps prio

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r to asking for your feedback.

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