CASE STUDY
Name: Xianbo Xie
Course: Introduction financial planning
Tutor: Cath Sharples
Question one
Cash flow statements tax calculations and balance sheet for the 3 financial years ending 30 June 2015 - 2017
Family balance sheet
Financial year ending June 2015
Assets $ $
Family house 620,000
Boat 20,000
Car Jenny 35,000
Car Jerry 12,000
House contents 50,000
Commonwealth Bank shares 53,000 Term deposit with Bundoora 165,000
Savings account with Bundoora 26,000
Superannuation funds (combined) 330,000
Total 1,290,000
Liabilities
Family home mortgagee 250,000
Personal car loan 16,000
Credit card debt 6,000
Total 272,000
Net worth 1,018,000
The family’s Tax Calculation
Financial year ending June 2015 $ $
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deposits 4,455
Employer Superannuation contribution (15% tax deduction) 9975 215,633
Employer Superannuation contribution (15% tax deduction) 4750
Total 188,959
Less tax payable 78,235.06
Net income 110,706
Expenses
Mortgage and loan payments 29,500
Work related expenses 2,500
Insurance 3,000
Household expenses 25,800
Private education expenses 17,000
Utilities 4,200
Entertainment 8,000
Travel and holidays 7,000
Motor vehicle expenses 8,500
Sundries 2,000
Total 107,500
Surplus 3,200
Family balance sheet
Financial year ending June 2016
Assets $ $
Family house 663,400
Boat 19,400
Car Jenny 35,000
Car Jerry 12,000
House contents 48,500
Commonwealth Bank shares 52,500 Term deposit with Bundoora 165,000
Savings account with Bundoora 26788
Superannuation funds (combined) 362,230
Total 1,395,58
Liabilities
Family home mortgagee 224,600
Personal car loan 11,900
Credit card debt 6,000
Total 242,500
Net worth 1,152,658
The family’s Tax Calculation
Financial year ending June 2016 $ $
Assessable income Jerry’s Salary 108,150
Jenny’s Termination payment 15,000
Fully franked dividend 2,729.5
Savings account 269
Term deposits 4,455 conservative fund 8,619 capital stable fund 5,622.75
Less Allowable deductions
Work related expenses 2,500
Total allowable deductions 2,500
Taxable income 173,585.8
Gross tax payable 52,173.45
Add Medicare levy (2%) 3,471.716
Net tax payable 55,645.15
Family 's Cash flow statement
Financial
1. The first step to evaluating the cash flows is to conduct the depreciation tax flow analysis. Depreciation is not a cash flow, but the depreciation expense lows the taxes payable for the company. As a result, the tax effect of deprecation needs to be calculated as a cash flow. There are two depreciable items on the company's balance sheet the building and the equipment. The equipment is known to have a seven year depreciable life, which will be assumed to be straight line. The building is also assumed to be subject to straight line depreciation, this time of forty years. The tax saving reflects the depreciation expense multiplied by the tax rate, which in this case is assumed to be 28%. The following table illustrates the tax effect in future dollars of the depreciation expense:
DQ 1: What are the differences between the direct and indirect presentation of cash flows? What are the advantages and disadvantages of the direct and indirect methods and which does the Financial Accounting Standards Board (FASB) favor and why?
A line of credit is an informal agreement that permits a company to borrow up to a prearranged limit
Assignment - AFF2491 Company Reporting Semester 1 2013 This assessment task is designed to test a student’s achievement of objectives 1, 2, 3 and 4 (refer to AFF2491 Unit Guide). It is an individual assessment task. This assignment must be handed in for successful completion of this unit. It will contribute 15% towards the final mark in this unit. The assignment consists of: Part B (7 Marks) Accounting for income tax Part C (8 Marks) Consolidation This assignment is due on Friday 10 May 2013 by 5:00pm (Week 9). Students are required to submit a hard copy in the assignment box located at Level 3, Building H, Caulfield Campus.
Mohana, R (2011). Financial Statement Analysis and Reporting. New Delhi: Asoke K. Ghosh, PHI Learni
To prepare a comprehensive balance sheet and Single-Step Income Statement presented in good form and derived from a list of various accounts. The amounts relative to each account will be given and the student will learn to determine whether an account is a balance sheet account or a
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Cash flow statements tax calculations and balance sheet for the 3 financial years ending 30 June 2015 - 2017
RAH Industries has the following financial statements for 2014 and 2015. RAH’s stock has no par value. The firm paid a dividend in 2015 of $500 million. Long-term debt of $150 million was retired in 2015. RAH also issued stock and long-term debt in 2015. There are 4 questions. Show your work in arriving at your answers. Assume RAH uses these statements for both financial reporting and tax purposes and that it sold no assets during 2015. Compute the cash flows for 2015 using (1) the financial statement of cash flows with notes payable as financing liability (i.e., included in the concept of Net Operating Working Capital) (2) the accounting statement of cash flows, also with notes payable as financing liability, as above. (3) Write a paragraph
class he had missed had been devoted to a lecture and discussion of the statement of cash flows, and
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