BU1002/BU1902 – Accounting for Decision Making Topic 4 – Workshop Activities, 2021

Topic 4 – Statement of Financial Position

Workshop Activities
Activity

Complete the diagram to summarise how assets and liabilities are defined and recognised.

Asset
Definition Recognition

Future + + Probable + =
economic
benefit

Liability
Definition Recognition

Outflow of + + Probable + = Recognise

resources on balance
embodying sheet
future
economic
benefits

Activity: Think and discuss

5.4 Discuss if the following statements are true or false.

a. The terms ‘accounts receivable’ and ‘creditors’ mean the same thing.
b. The Statement of Financial Position is a financial statement that shows the financial position
of an entity as at a point in time.
c. Ms Entrep invests her own cash to start a business. This transaction will increase the equity
and assets of the business.
d. All entities are legally obliged to prepare general purpose financial statements.
e. The measurement system used in accounting is historical cost.

Activity 5.20

Non- Non-
Current Current Total Current Current Total Share Retained Total
assets Assets Assets Liabilities Liabilities Liabilities Capital Earnings Equity
35,000 46,000 81,000 9,000 28,000 37,000 30,000 14,000 44,000
57,000 84,000 141,000 29,000 52,000 81,000 53,000 7,000 60,000
159,000 136,000 295,000 55,000 102,000 157,000 122,000 16,000 138,000
15,900 24,000 39,900 6,900 16,000 22,900 14,800 2,200 17,000
46,941 82,186 129,127 28,255 40,500 68,755 48,750 11,622 60,372
BU1002/BU1902 – Accounting for Decision Making Topic 4 – Workshop Activities, 2021

Activity: 5.21

Identify whether the following assets would be classified as current or non-current as at the end of
the reporting period and justify your classification decision.

a. Prepaid expenses ( C )

b. Intangible assets ( NC )

c. Plant and equipment ( NC )

d. Accounts receivable ( C )

e. Cash and cash equivalents ( C )

f. Inventory ( Depends can be both)

Activity: 5.22

Identify whether the following liabilities would be classified as current or non-current as at the end
of the reporting period and justify your classification decision.

a. Provision for employee long service leave ( C )

b. Long-term bank loan ( NC )

c. Payroll taxes payable ( C )

d. Trade payables ( C )

e. Bank overdraft ( C )

f. GST payable ( C )
BU1002/BU1902 – Accounting for Decision Making Topic 4 – Workshop Activities, 2021

Activity:

Prepare a Statement of Financial Position (Balance Sheet) for the business as at 30 June 2019.

Toby and Talea McKellar are the joint owners of Beaut Beach Caravan Park, which is near a
swimming beach popular during the summer months. The park provides not only camping facilities
for caravans and tents but also up-market cabins with kitchenettes and ensuites. For the year ended
30 June 2019, Toby and Talea determined the following financial information for their business. 

A real estate agent valued the buildings at $500 000 on 30 June 2019. 

Explain why you have used a particular valuation for the buildings in the Statement of Financial
Position (Balance Sheet). 

BEAUT BEACH CARAVAN PARK 

Statement of Financial Position 
 
 Current assests X1000  X1000 
 Cash on hand 20  
 Accounts receivable 8   
 Supplies on hand 15 43 
 Non current assets    
 Buildings 420  
 Other equipments 63  483 
    526 
 Current Liabilities    
 Accounts Payable 87  87 
    87 
    439 
 Equity    
 Toby and Talea McKellar, Capital 439 439
    439 
    439 
BU1002/BU1902 – Accounting for Decision Making Topic 4 – Workshop Activities, 2021

Activity: 5.17

From the following account balances of Platypus Pty Ltd as at 30 September 2019, produce a
statement of financial position in both the T-format and the narrative classified format

Statement of financial position in T-format:

PLATYPUS PTY LTD

Statement of financial position

Current assets X1000 Liabilities

Cash At bank 55
Accounts Receivable 27.5
Inventory 50
132.5
Non-Current assets
Land 60
Fixtures and fittings 8
68
200.5

Statement of financial position in narrative format:

PLATYPUS PTY LTD

Statement of financial position

Current assets
BU1002/BU1902 – Accounting for Decision Making Topic 4 – Workshop Activities, 2021

Activity: 5.19

5.19 From the following account balances of Graceview as at 31 December 2019, prepare a
statement of financial position in both the T-format and the narrative classified format. Note:
you will need to determine the balance of the retained earnings.

103.5

Statement of financial position in T-format:

GRACEVIEW
Statement of financial position

Current Assets X1000 Current liability X1000

Cash At Bank 12 Acc Payable 25
Acc Receivable 56 Total 25

inv 88 NCL
Other current assets 16 Borrowings 200
Total 172 Provisions 56
Non current Assets Total 256
Intangible assets 275 281
Other financial assets 78.5 Equity
Land and buildings 359 Share Capital 500
total 712.5 Retained earnings 103.5
Total 603.5
Total 884.5 Total 884.5
BU1002/BU1902 – Accounting for Decision Making Topic 4 – Workshop Activities, 2021

Statement of financial position in narrative format:

GRACEVIEW
Statement of financial position

Current assets
Cash At Bank 12
Acc Receivable 56
inventory 88
Other current assets 16
Total current assets 172
Non current Assets
Intangible assets 275
Other financial assets 78.5
Land and buildings 359
Total NCA 712.5
Total Assets 884.5
Current liability X1000
Acc Payable 25
Total 25
NCL
Borrowings 200
Provisions 56
Total 256
281
Net asset 603.5
Equity
Share Capital 500
Retained earnings 103.5
Total euity 603.5