F2F A 2(2) - Weekly Assignments PDF

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UNIVERSITY OF ONTARIO INSTITUTE OF TECHNOLOGY BUSI 1130—Introductory Financial Accounting I Winter 2019 Face-to-face hand-in assignment #2 Submission Requirements  You must hand in your face-to-face submissions at the start of class. Late submissions will not be accepted.  Face-to-face assignments must be typed.  You must attempt to answer all questions, including any required calculations, in order to receive a passing grade.  YOU MUST WORK ON YOUR OWN. INSTANCES OF PLAIGARISM WILL BE TAKEN SERIOUSLY. Part I – Dollarama Financial Statements (found in Content folder):

1. Provide a description of Dollarama Inc. Include the business environment along with stakeholders that are relevant to Dollarama. Dollarama is considered multi-billion-dollar corporation. Dollarama was formed in October 20th, 2004 under the Canadian Business Corporations Act. Some factors that can affect business environments along with stakeholders is competition, economical status, social factors, political factors and technological factors. 2. What pages can you find Dollarama’s audited financial statements and what are the names of the financial statements? You can find Dollarama’s audited financial statements on page 1. The names of these financial statements are the consolidated statements of financial position, changes in shareholder’s equity, net earnings, cash flows, and comprehensive income. 3. What were Dollarama’s sales for the period and what was their comprehensive income? Calculate the Profit Margin or 2018 and 2019.

Sales Comprehensive Income Profit Margin

2018

2019

$ 3,266,090.00 $ 488,333.00

$3,548,503.00 $ 581,411.00

39.80%

39.30%

Profit Margin = Net Income/ Net Sales *100%

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4. What are the total assets and liabilities for Dollarama? How much is current and how much is non-current? If you take total assets minus total liabilities what is the value and what does this number represent?

Total Assets Total Liabilities Current Liabilities Non – Current Liabilities

2018 $ 1,934,339.00 $ 2,186,697.00 $ 720,945.00 $ 1,465,752.00

2019 $ 2,177,895.00 $ 2,411,991.00 $ 288,583.00 $ 2,123,408.00

Owner’s Equity for 2018 = Total Assets – Total Labilities = $ 1,934,339.00 - $ 2,186,697.00 = $ - 252,358.00 Owner’s Equity for 2019 = Total Assets – Total Labilities = $ 2,177,895.00 - $ 2,411,991.00 = $ - 234,096.00 When Equity is negative it means that liabilities are greater than assets.

5. What accounting standard does Dollarama report under? Explain why Dollarama would be required to report under this standard. The accounting standard that Dollarama reports under is referred to as IFRS but it stands for International Financial Reporting Standards. Dollarama is required to report under this standard because report under this standard because just how other companies do so, by having all companies reporting under the same standard it creates steadiness, a common set of rules all companies can follow and report to. Part II: Please complete the following question:

Q1: Below is a simplified balance sheet for Summerside Inc. (Summerside):

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Calculate the following on December 31, 2017 using Summerside's balance sheet and a net income of $450,000. 1. working capital Working Capital = Current Assets – Current Liabilities Working Capital = $ 2,250,000.00 - $ 1,750,000.00 = $ 500,000.00 2. Return on Assets Return on Assets (ROA) = Net Income / Total Assets * 100% Return on Assets (ROA) = $ 450,000.00 / $ 8,500,000.00 * 100% = 5.29 % 3. Return on Equity Return on Equity (ROE) = Net Income / Shareholders’ Equity *100% Return on Equity (ROE) = $ 450,000.00 / $ 4,250,000.00 *100% = 10.58 % (hint: if you are not given enough information to calculate an average use the account balance)

Q2: You have been provided with the following alphabetical list of accounts for Toronto Ltd. for 2017. Use the information to prepare an income statement, statement of changes in equity, and statement of comprehensive income for the year ended December 31, 2017, and balance sheet as of December 31, 2017. You should be able to figure out how to treat accounts that have names unfamiliar to you by applying your understanding of the financial statements learned in this chapter.

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Income Statement Cash Sales Credit Sales Total Sales Cost of Goods Sold Gross Profit Advertising and Promotional Expenses Depreciation Expense Research Expense Salaries and Wages Expense Operating Income Interest Expense Interest Revenue Net Financing Cost

December 31st , 2017 $ 85,000 343,800 $ 428,800 (120,000) $ 308,800 43,000 21,700 18,800 84,000 $ 141,300 11,200 1,500 9,700

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Other Expenses Earning before Income Tax Income Taxes Net Earnings

22,000 $ 109,600 21,000 $ 88,600

Statement of Change in Equity Net Earnings Investment in Shares of Other Corporations Common Share Dividends Net Increase in Owner’s Equity

December 31st, 2017 $ 110,600 130,000 111,000 (33,000) $ 318,600

Statement of Comprehensive Income Net Earnings Dividends Retained Earnings Charitable Donations Accumulated Other Comprehensive Income Other Comprehensive Income Total Comprehensive Income

December 31st, 2017 $ 110,600 (33,000) 89,000 (10,000) 45,000 25,000 $ 226,600

Balance Sheet December 31st, 2017 Assets Current Assets Cash Accounts Receivable

34,000 38,000

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Repaid Expenses Inventories Investment in Shares of Other Companies Non- Current Assets Accounts Receivable (Due in 2021) Property, Plant and Equipment’s Accumulated Depreciation Other Non- Current Assets Total Assets Liabilities Current Liabilities Accounts Payable Accrued Liabilities Salaries and Wages Payable Income Tax Payable Current Portion of Long-Term Debt Dividends Deposits from customers Bank Loan Non- Current Liabilities Long Term Debt Total Liabilities

3,500 52,000 130,000

15,000 260,000 (51,000) 18,800 $ 501,300

31,000 8,000 5,500 4,500 25,000 33,000 9,200 27,500 100,000 $ 243,700

Equities Common Share Investment in Shares of Other Corporations Total Equities

$ 241,000

Total Liabilities and Equities

$ 484,700

110,000 130,000...