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    Accounting

    CORPORATE ACCOUNTING Assignment Help

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    CORPORATE ACCOUNTING Assignment Help


    CORPORATE ACCOUNTING

    BANNERMAN RESOURCES LIMITED

    Cash flow statement

    (i)Preparing the statement of cash flow and making discussion regarding changes in items of the statement
    According to Cassar et al. (2015, p.242), the items presented in the statement of flow of cash like receipt of interest and employees and supplier’s payment has been analyzed. The changes in the amount of the items have been observed while preparing the statement of cash flow. The interest received has been amounted to $41 for the year 2017 whereas the employees and supplier’s payment has been amounted to $1,671 for the year 2017. The other items of the statement also shows amount which is different from each other. The plant, equipment and property purchase item of the statement of flow of cash represents the amount of $ 12for the accounting year 2017 whereas the sales from plant, equipment and property disposal has been analyzed to be $700 for the accounting year 2017 (Bannermanresources.com, 2017).

     
    (ii) Discussing the cash flow statement items changes for the previous three years and making analysis by comparing each item of cash flow statement
    The item changes in the statement of flow of cash for the previous years have been analyzed while preparing the statement of flow of cash. The cash flowed from the various activities as presented in the above table has been analyzed to obtain the net cash inflow or outflow of the said organisation. The net flows of cash of the items under the activities which are listed under the operating head are also analyzed to show values that are varied from one other. The total or net flows of cash of the various items from activities which are listed under the operating head are amounted to $1371, $3145 and $1526 for the year 2017, 2016 and 2015 respectively (Bannermanresources.com, 2017). The total or net flows of cash of the various items from activities which are listed under the investing head are amounted to $651, $568 and $3146 for the year 2017, 2016 and 2015 respectively (Bannermanresources.com, 2017). The total or net flows of cash of the various items from activities which are listed under the financing head are amounted to $3841, $3000 and $1855 for the year 2017, 2016 and 2015 respectively (Bannermanresources.com, 2017). Thus, it can be analyzed from the above prepared table of the statement of flow of cash that the changes in the items of the three previous years can be determined easily.
     
    Providing analysis for comparing the statement of cash flow each item
    The statement of flow of cash each item shown under the head of activities from operations represents the source of cash generating of the given company. The outflow or inflow of cash from the presented items under the head of activities from the operations of the business shows the core services and products of the company. Moreover, the items that are presented under the heading of investing activities help to record the company or organisational investments. The recorded items under the head of activities from investment present the changes in assets, investment and the equipment. Generally, the investing activities of each item are considered to be accountable for the cash outflow of the company. The items of the statement of cash flow under the head of financing activities are considered to be accountable for the cash inflow of the company. Finance cost of transacting and the share issue proceeds from the activities of investing shows amount which is varied from one other. The amount analyzed for the Finance cost of transacting has amounted to $219 whereas the share issue proceeds have amounted to $4060 for the year 2017. Therefore, in this way, the analysis of comparing each item under the various head of activities in the state has been done.
     
    Comprehensive   income statement
    (iii)   Explanation of items understanding of Comprehensive Income Statement 
    According to Francis et al. (2015, p.1285), the items interpretation of the statement of income includes the analyzing of income statement each item of the organisation. The item of the statement of income that is recorded at the first place is revenue of the company. The revenue of the company for the year 2017, 2016 and 2015 are analyzed to $137, $4456 and $89 respectively (Bannermanresources.com, 2017). The items which are recorded after calculating the total revenue of the company in the statement are the expenditure made by the company. The revenue of the company has been observed to be increasing from the year 2015 to the year 2016 but again the revenue of the company decreased from the year 2016 to the year 2017. The other item of expenditure in the statement of income includes the expenses of depreciation, regulatory and compliance expense which amounted to $ 38 and $ 179 respectively for the following year 2017 and 2016. The total loss before deducting the expense of tax for the year 2017, 2016 and 2015 has been analysed to $2955, $302 and $4741 respectively. The net or total loss of the company after making deduction of expenses of tax has been analyzed to $2696, $157 and $ 4241 respectively. The net income of the company has been analyzed to $2231, $ 8762 and $1242 for the year 2017, 2016 and 2015 respectively (Bannermanresources.com, 2017).
     
    (iv) Demonstration of items that are included in statement of income
    The statement of income items that are included in the statement are revenue’s interest, other income, benefit of the employees, cost of borrowing and many other items. The company’s sales or revenue is represented on the basis of growth of the organisation in the earlier or previous three years. The sales amount of the company or the organisation during previous three years helps in determining the revenue of the company.The expense of tax of the company has also been recorded in the above table for calculating the net loss or profit of the company. Therefore, the income of the company has been determined by making calculations on the various items shown in the statement of income.
     
    (v) Description of   items that are not included in statement of income
    According to Drake et al. (2014, p.1673), the statement of income items that are not included in the statement are the cost of goods sold. The income statement items of expenses such as the professional fees, consultancy fees, corporate costs, marketing expense, are also not recorded in the income statement under the expenditure head.
     
    (vi) Identification of expenses of tax amount observed in the company’s annual report
    The expense of tax of the company has been analyzed in the statement of income of the company. The expense of tax of the company has been observed to $259, $145 and $500 for the year 2017, 2016 and 2015 respectively (Bannermanresources.com, 2017).
     
    (vii) Explanation and identification of the expenses of tax observed in accounting income
    The expense of tax of the company as reported in the income accounting of the organisation has been analyzed to $259, $145 and $500 for the year 2017, 2016 and 2015 respectively (Bannermanresources.com, 2017). The tax expense of the company is liability payable to the municipal, federal and the state government for the stated time period. The expense of tax of an organisation is evaluated by doing multiplication of the loss or profit of the company by the rate of tax of the same company. 
     
    (viii) Making comment on deferred tax assets/liabilities reported in the statement of finance
    The deferred tax of the company is the tax which is deducted already by the company. The advance amount deduction is made for the tax which is deferred. This deducted amount can be carried forward by the company over the coming year and could also be payable for the period of time in future. The difference which is noticed in between income accounting and the income taxable is determined as the tax which is deferred. When the company has no capability to use the deferred tax due to its meeting of test capacity of 50%, the company's assets will stay untouched in the statement of finance of the company. If the company suffered from continuous losses from making adjustments in the financial position of the company, then the assets of tax which is deferred will show an increase in its amount. This increase in amount will in accordance with the loss amount suffered by the company.
     
    (ix)   Identifying payable income tax or assets current tax of the company.  Reasons for the distinctions in   income tax payable and income tax expense
    The income tax payable is $259, $145 and $500 for the year 2017, 2016 and 2015 respectively (Bannermanresources.com, 2017). Besides, the current asset tax of the company is not identified because no current asset tax is found in the finance statement of the company. 
     
    According to Hribar et al. (2014, p.506), the income tax which is payable by the company is not considered as same as the income tax expense of the company. This is due to the different set of rules of accounting followed by the organisation for the income tax which is payable and different accounting rules for expenses of income tax. 
     
    (x) Interpretation of deferred tax assets and deferred tax liabilities 
    The tax on deferred liability is considered to be the opposite of tax of deferred assets. The tax on deferred assets is referred to as the consumption of payment of tax for coming years or following years. According to Reid et al. (2017, p.16), there is no change observed in the tax of deferred assets and also in the tax of deferred liability in the statement of finance of the organisation. The reason for this is that both taxes on deferred assets and tax of deferred liability are not recorded in the financial position statement of the organisation.
     
    (xi)   Identifying new insights obtained by the company regarding the tax of accounting income 
    According to Gunanta et al. (2015, p.17), the interpretation of the new insight which could be obtained by the company about the income tax are related to the entertainment expenses. The company could know that the expenses of entertainment are no longer tax deductible. Therefore, this new insight can be known by the organisation. The information or data about the new insights would help the organisation in carrying on its operations of business efficiently and smoothly.