Albany Senior High School/Dora's Doorframes

Users and Uses (Maree)

Users:

Investors of Doras doorframes to ensure they will have a return on their investment.

Lenders(bank) would be intrested in Dora's financial information to ensure Dora will be able to repay her loan

Dora( owner) also would be intrested in the financial information so she can ensure she has made a profit from her business.

Tax Authorities( I.R.D) to make sure Dora is paying the correct tax figures.

The customers of Dora's doorframes to ensure this business is stable, incase a problem occurs with the doorframes the customers will be able to return them.

Dora's Doorframes would use accounting information towards budgeting, Investing 

Income (Alana)

Cash sales are income for Dora's Doorframes because it increases the bank asset when the cash is recieved. This will increase Dora's Doorframes profit which leads to an increase in equity. It is not a contribution from Dora, the owner. It is probable because Dora's Doorframes has already recieved the money. It is reliable because the receipt from the cash sale provides evidence of the transaction. 

Assets/ Liabilities (Alex D/ Aleks P)

Assets

Dora has purchased a building in a past transaction for her company Dora's Door Frames.Dora's Door Frames has present control of the building for Dora's Door Fames benefit because no one else can use it for storage services.Dora's Door Frames will benefit from the building in the future as it will be used to store the business's stock which will be sold which will earn income for the business. The income will result in cash being received which is the economic benefits flowing to Dora's Door Frames.

Liabilities

Dora has taken out a loan of $21012 to buy black market kauri for her new line of door frames. Dora's door fames have a present obligation to pay the loan back to the bank over a long period of time continuing into the foreseeable future.

Accounting Entity (Changwe)

The financial affairs of Dora's Doorframes are kept separate and distinct from the financial affairs of Dora. E.g, Dora's boat will not be included in be balace sheets as an asset of the business.This is improtant because Dora will have an indication of how Dora's Doorframes is doing without Dora's assets.

Going Concern (Joe)

dora's doorframes financial statements are prepared under the assumption that doorframes will continue running normally into the forseeable future,

eg. for doorframes goodwill is an example of going concern. this is an example of going concern because it shows that the buisness looks to keep the same staff, same owner and same location. keeping goodwill the same value?

Prudence (Brittany)

Dora's Doorframes applys the Prudence concept as when their accountants prepare financial statements, they will err on the conservative side as to not overstate assets and revenue or to understate liabilities and expenses.

Examples of prudence:

Provisions for doubtful debts: All invoices may not be received, therefore Dora's Doorframes create an allowance for doubtful debts (invoices that may not be received). This reflects the prudence concept as the provisions for doubtful debts are taken from the accounts receivable, therefore assets (accounts receivable) are not overstated.

Depreciation: by allocating the cost of an asset over its useful life Dora's doorframes is being prudent in valuing it goods

Monetary Measurement (Sam)

All transactions made by Dora are to be recorded in a common unit of currency.

example, in New Zealand the currency is the NZD $ (New Zealand Dollar) or in Japan the currency would be JY ¥ (Japanese Yen).

Materiality (Renée)

The door frames in Dora's Doorframes financial statements are material because if they were to be left out, it would influence the decisions made by Dora or other users.

Reporting Period (Andy)

The financial life of Dora's Doorframes will be divived into the equal periods length of time E.g As at 31st March 2012.

Historical Cost (Sophie)

When Dora purchased a delivery vehicle it will be recorded in the balance sheet at the price when brought. It is important because it is representationally faithful based on fact rather than opinion due to source documents.

Accrual Basis (Clarentia)

In the concept of accrual basis transactions are recorded in the period to which they relate. For example, Wages of Dora's Doorframe's employees are due. The accrued expense of the wages would be reported in the statement of financial position as a current liability and recorded in the income statement as wages expense.

Balance Sheet (Brandon)

Dora's Doorframes Balance Sheet as at 31st March 2012	$	$	$
Current Assets
Prepayment		1000
Accounts Receivable(note 1)		7000
Bank		5550	13550
Non Current Assets
Property Plant and Equipment
Total Carrying Amount		160000
Investment
Shares		3000	163000
Total Assets			176550
Less: Liabilities
Current Liabilities
Gst	5000
Accounts Payable	14500
Income in Advance	500	20000
Non Current Liabilities
Loan(due 2015)		150000
Total Liabilities			170000
Net Assets			6550
Owners Equity
Opening capital
Plus: Profit for year
Less: Drawings
Closing capital

  Cash Flow Statement (Jess)

Doras Doorframes Balance sheet as at 31 March 2012

Current Assets

	$	$
Cash Receipts
Doorframe Sales	25,000
Accounts Receivable	5,000
Loan raised	2,000
Total Cash Receipts		32,000
Less: Cash Payments
wages	18,000
general expenses	3,000
Payment to suppliers	10,000
Total cash payments		31,000
Net Increase in cash		1,000
Add Bank Balance at beginning		3,000
Estimated bank balance at end		4,000

Income Statement (Teri)  

Dora's Doorframes

Income Statement ======

for the year ended 31st March 2012

Description	$	$
INCOME
Sales	110,600
Less sale returns	520
Net sales		110,080
Less Cost of Goods Sold	47,981
Gross profit		62,099
Add other income
Door sales	12,716
Dividends received	5200	17,916
		80,015
EXPENSES
Distribution expenses
Advertising	8900
Mill maintenance	16,000
Travelling expenses	6210
Depreciation - mill	9000
Wages - workers	32,000	72110
Administrative expenses
Bad debts	180
Telephone and internet expense	7800
Wages - office	27,600
Accountancy fee	1500	37080
Finance expenses
Interest on Loan		850
Total Expenses		110,040
LOSS FOR THE YEAR		(30,025)

Balance Sheet (Brandon)

	$	$
Cash Receipts
Doorframe Sales	25,000
Accounts Receivable	5,000
Loan raised	2,000
Total Cash Receipts		32,000
Less: Cash Payments
wages	18,000
general expenses	3,000
Payment to suppliers	10,000
Total cash payments		31,000
Net Increase in cash		1,000
Add Bank Balance at beginning		3,000
Estimated bank balance at end		4,000