ACC1AIS – Homework Exercises – workshop 9

Excel Exercise 1

Goal: Create an Excel worksheet to prepare an income statement, a balance sheet and a statement of
changes in equity for a start-up business.

Scenario: You have started a valet parking business called First Class Valet. You have tracked your
cash, supplies, revenues, expenses, and other items in a spreadsheet. The totals for each account at
the end of your first month are as follows (ignore GST):

1. Sales Revenues, $400

2. Supplies on hand (asset account), $175

3. Cash, $300

4. Supplies expense, $225

5. Capital, 1 July 2019: $250

6. Salary payable, & Salary expense, $50.

7. Drawings: $20

8. Unearned revenue: $75

9. Accounts receivable: $5

Required

a) In a new worksheet, prepare an income statement, a balance sheet, and a statement of changes in
equity for 31 July 2019. Your statements should show the result of the following:

1. How well did your business do in its first month of operations?

2. How did this affect your capital account?

b) In a different worksheet draw a graph to visualise the financial performance of your company in an
Excel spreadsheet.

Hint: Your graphs could visualise the following ratios:

1. Expense to sales ratio

2. profit margin ratio

c) provide a brief explanation about the financial performance of your company.

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Suggested Format Excel Exercise 1

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Excel Exercise 2

Goal: Create a worksheet that shows accounts receivable activity for a company.

Scenario: You have a summer holiday job with Qantas headquarters in Sydney. Assume that shortly
into your employment your supervisor asks you to prepare an Excel spreadsheet that breaks down
the month’s accounts receivable by customer. She gives you the partial data:

Customer ID Customer name Balance of Accounts December sales December

Assume Qantas’s credit terms are net 30 i.e., all customers are required to pay the full amount of
accounts receivable within 30 days.

Required

When you have completed your worksheet, answer the following questions:

1. How much cash did Qantas collect from these three customers during December?

2. How much do these three customers still owe Qantas at the end of December? (Hint: you are
required to calculate the closing balance of Accounts receivable).

3. Considering that Qantas’s credit terms are net 30, calculate the total amount that should be
allocated to allowance for doubtful debts.

4. Considering that Qantas’s credit terms are net 30, calculate the average number of days that it
takes for Qantas to collect payment from customers after a sale is made.

Hint: To calculate this you are required to use the following formula:
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑛𝑒𝑡 𝑎𝑐𝑐𝑜𝑢𝑛𝑡𝑠 𝑟𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑐𝑜𝑙𝑙𝑒𝑐𝑡𝑖𝑜𝑛 𝑝𝑒𝑟𝑖𝑜𝑑 = × 30 𝑑𝑎𝑦𝑠
𝑁𝑒𝑡 𝑠𝑎𝑙𝑒𝑠

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Instruction - Excel Exercise 2

1. Open a new Excel Spreadsheet.

2. Create a bold-faced heading for your spreadsheet that contains the following:

a. Excel Exercise 2

b. Qantas Accounts receivable

c. Today’s date Hint: Todays date function in Excel is =TODAY()

3. Two rows down from your heading, create a row containing the following column headings:

a. Customer ID

b. Customer name

c. Beginning balance

d. Sales

e. Collections

f. Ending balance

4. Enter the data from the scenario into the spreadsheet. At the end of the entries, create a row for
“Totals” and calculate totals for all financial columns.

5. Two rows beneath the scenario data, calculate the average collection period.

6. Include a row for net sales underneath this calculation.

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Suggested Format Excel Exercise 2

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Excel Exercise 3

Goal: Create a spreadsheet to calculate Woolworths’ gross profit ratio, inventory turnover, days in
inventory ratio, and current ratio for the past three years i.e., 2018, 2017, and 2016.

Scenario: Go to the website of Woolworths www.woolworthslimited.com.au . Their shareholder

Hint: Easier way to find the financial information of Woolworths over the past three years is to refer
to the La Trobe University Library and obtain the required information from the Morningstar
DatAnalysis Premium. You can find this database here: https://datanalysis-morningstar-com-
au.ez.library.latrobe.edu.au/af/dathome?xtm-licensee=datpremium

1. What has happened to Woolworths’ gross profit ratio over the past three years?

2. What can you tell about Woolworths’ inventory operations from its inventory ratio, and days in
inventory ratio for the past three years?

3. What can you tell about Woolworths’s current ratio for the past three years?

4. Draw graphs to visualise the ratios.

5. provide a brief explanation about the trends of ratios for the past three years.

Hint: You can calculate the ratios by using the following formulas:

𝐺𝑟𝑜𝑠𝑠 𝑝𝑟𝑜𝑓𝑖𝑡
𝐺𝑟𝑜𝑠𝑠 𝑝𝑟𝑜𝑓𝑖𝑡 𝑟𝑎𝑡𝑖𝑜 =
𝑁𝑒𝑡 𝑠𝑎𝑙𝑒𝑠 𝑟𝑒𝑣𝑒𝑛𝑢𝑒

𝐶𝑜𝑠𝑡 𝑜𝑓 𝑠𝑎𝑙𝑒𝑠
𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑡𝑢𝑟𝑛𝑜𝑣𝑒𝑟 =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦

365 𝑑𝑎𝑦𝑠
𝐷𝑎𝑦𝑠 𝑖𝑛 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 =
𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑡𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜

𝑇𝑜𝑡𝑎𝑙 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠

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Instruction - Excel Exercise 3

1. Open a new worksheet.

2. Create a bold-faced heading as follows:

a. Excel Exercise 3

b. Evaluating Woolworths’ ratios

c. Today’s date

3. Two rows down and two columns over, create bold and underlined headings for the most recent
three years i.e., 2018, 2017, and 2016.

4. Locate the following information for Woolworths for 2018, 2017 and 2016 (found in the
consolidated statement of profit or loss):

a. Sales (in millions)

b. Cost of sales

c. Gross profit

5. Locate the following information for Woolworths for 2018, 2017, 2016 (found in the consolidated
statement of financial position):

a. Current assets

b. Current liabilities

c. Inventory

Note: You are required to obtain the 2015 inventory to be able to calculate the 2016 inventory
turnover.

6. Calculate the ratios.

7. draw the graphs in a new worksheet.

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Suggested Format Excel Exercise 3

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