FOA Assignment completed

Plagiarism Statement Declaration Form

Semester : 2
Course Code and Title :ABFA 1023 FUNDAMENTALS OF ACCOUNTING
Declaration
We confirm that we have read and shall comply with all the terms and condition of
TAR College’s plagiarism policy.
We declare that this assignment is free from all forms of plagiarism and for all intents and purposes is our own properly derived work.
We further confirm that the same work, where appropriate, has been verified by antiplagiarism
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Date :________________________

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Marking Scheme
Description
Excellent
Good
Average
Poor
Very Poor
(A) Source Document / Information(10marks)
Identify and collect appropriate source documents / information from various sources including text, journals, websites etc. where appropriate.
(9-10marks) Demonstrate excellent collation of source documents and information that relevant and appropriate for the type of business selected. Minimum relevant reference were 20 from text, journals, website etc.
(7-8marks) Demonstrate good collation of source documents and information that is relevant and appropriate for the type of business selected. Minimum relevant reference were 15 from text, journals, websites etc.
(5-6marks) Demonstrate average collation of source documents and information that is relevant and appropriate for the type of business selected. Minimum relevant references were 10 form text, journals, websites etc.
(3-4marks) Demonstrate average collation of source documents and information that is relevant and appropriate for the type of business selected. Minimum relevant reference were 5 from text, journals, websites etc.
(1-2marks) Demonstrate very poor collation of source documents and information that is relevant and appropriate for the type of business selected. Minimum relevant reference were less than 5 from text, journals websites etc.
Sub Total (A)

(B) Report presentation & referencing
(30marks)
Adequate research done to support the report. References were clearly labeled and listed in the table of contents, with the page numbers easy to follow through by tutor.
(25-30 marks)
Demonstrate excellent report writing skills that is concise simple, accurate and complete. Researches were thorough and complete that answer ALL requirements stated on the coursework. There were thorough write ups of relevant and complete definition where appropriate. References were clearly labeled and in accordance to Harvard referencing standard. Table of contents, with the page numbers were easy to follow through by tutor. Format was original and creative.
(19-24 marks)
Demonstrate good report writing skills that is quite concise simple, accurate and complete. Researches were thorough and complete that answer ALL requirements stated on the coursework. There were thorough write ups of relevant and complete definition where appropriate. References were clearly labeled and in accordance to Harvard referencing standard. Table of contents, with the page numbers were easy to follow through by tutor. Format was original and creative.
(13-18 marks)
Demonstrate average report writing skills that is somewhat concise, simple, with some inaccurate and incomplete passages.
Researches were not that thorough and complete and fail to answer some requirements (at least one) stated on the coursework. There were not so thorough write ups of relevant and complete definition where appropriate. References were sometimes not completely written or in accordance to Harvard referencing standard. There were at least 2 mistakes from the table of contents, with the page numbers and difficult for tutor to follow through. Formats were similar to samples and not that creative.
(7-12 marks)
Demonstrate poor report writing skills that is not concise, simple, with some inaccurate and incomplete passages.
Researches were not that thorough and complete and fail to answer more than half of the requirements stated on the
Coursework. There were not so thorough write ups of relevant and complete definition where appropriate.
References were sometimes not written or in accordance to
Harvard referencing
Standard. There were at least 5 mistakes from the table of contents, with the page numbers and difficult for tutor to follow through. Format were similar to samples and not that creative.
(1 – 6 marks)
Demonstrate very poor report writing skills with lots of grammatical error and inaccurate information.
Most of the passages were incomplete.
Researches do not care about the coursework and was not that through. They fail to answer almost 75% of the requirements stated on the coursework.
There were no write ups of relevant and complete definition where appropriate.
References were mostly written and not in accordance to Harvard
Referencing standard.
There were more than 5 mistakes from the table of contents, with the page numbers and difficult for tutor to follow through. Format were similar to samples and not that creative. Sub Total (B)

GRAND TOTAL (A+B)

Comments by marker:

INTRODUCTION
Kentucky Fried Chicken (KFC) was established by Harland Sanders in Corbin, Kentucky during the year 1890. One day, Sanders cooked chickens with some spices, wheat flour and many more. He had invented a new recipe and archived success. He opened his first restaurant, “Sanders Court and Café” in a gas station in Cabin, Kentucky during 1930. As he became more famous, Governor Ruby Laffoon entitled him as a Kentucky Colonel for his hard work for the state’s cuisine.
After a few years, he upgraded his restaurant to 142 seats. He started using the pressure cooker to fried chicken and served his customers with better and faster service.
In the year 1940, Harland Sanders invented his first original recipe. He started to expand his fried chicken business by doing franchising. He sold franchise of his recipe to more than 600 outlets in United States of America and Canada. Apart from that, there was a first overseas outlet which located in England. In the year 1971, KFC became well-known as there were more than 3500 outlets from all around the world.
Now, KFC not only served fried chicken but also developed many new products such as burger, french-fries and many more. KFC also served many set meals such as Snack Plate, Dinner Plate, Variety Bucket, Zinger Burger, Chicky Meal and many more.

Type of Inventory
Our group has chosen the business of manufacturing fast food as the tile of our coursework. An example of a real business is one of the world's largest chain fast food restaurants KFC Holdings (Malaysia) Bhd (KFCH) Company.
Fast food manufacturing business consists of five types of inventory :
i) Raw materials – these are components that are acquired from suppliers, such as potatoes, wheat flour, salt, spices. ii) Poultry – these are the chicken meats and eggs that they collect from their own poultry farm. iii) Equipment and spare parts – these are the tools that are used in their restaurants to prepare meals. For example, gas pressure fryer. iv) Advertising materials – these are the new products that they use in advertisement to attract more customers.
v) Finished goods – these are the final products that they sell to their customers, such as Original Recipe® Chicken, KFC Original Recipe® and Zinger Burger. http://www.bursamalaysia.com/market/listed-companies/company-announcements/933217 Process of Manufacture
For example, we would like to use those inventories to show the manufacture process of making one of the KFC products, Zinger Burger. Firstly, the workers will send the ingredients such as chicken meat from their poultry farm to KFC restaurants. At the same time, they also ensure their raw materials such as wheat flour, salt and spices are sufficient to make enough burgers for the customers. After they prepare all the ingredients they will start to cook the chicken meat with the kitchen equipments like gas pressure fryer. When they are frying the chicken meat, they will prepare the vegetable for making the burger. For examples, they slice the tomatoes and lettuces. Next, they mix up the salt, vinegar and some spices. Furthermore, they also make the special sauce for the Zinger Burger using mayonnaise and some spicy powder. When the chicken meat already cooked, they slice the meat into six pieces. Before they combine the ingredients to make the burger, they cut the bread into two pieces. Lastly, they put the chicken meat, vegetable and the sauce between the bread. When they finish the process of making the burger, they will pack the burger into a box and is ready for served. http://www.allrecipesin.com/2012/08/11/zinger-burger/ Valuation of Inventory
There are two types of valuation of inventory method which is FIFO and WAC method. FIFO means first-in, first-out while WAC stands for weighted average cost. KFC company use the FIFO method. The costs of the inventories are allocated on the FIFO method as they need the fresh ingredients to cook the meal. Consequently, the chicken meats and other ingredients that received need to be used as soon as possible to manufacture the food. The computer system will record the costs according to the perpetual inventory valuation method. As a result, the latest and updated information are accessible. For example, the KFC restaurant receives RM5 per kg of chicken meat at 31 Jan 2011, so the total closing inventories of the chicken meat is RM 234322. They need to sell all the chicken meat before they use the following chicken meat. After they sell all the 1kg of chicken meat, they will start to use the new chicken meat. Next the finance manager will compare the cost against the net realisable value (NRV). The NRV of the ingredients such as chicken meats are analyzed through the approximate selling price. Suppose that the net realizable of chicken meat is RM 7 per kg, therefore the total value of the chicken meat is RM 320324. According to the LCM rule, the finance manager or the accountant will decide on the closing inventory as at 31 Jan 2011 is RM 234322. At the moment, the finance manager will assign the workers to record the amount in the book of prime entry and post to the following ledger.
Other than using FIFO , KFC also use Last In First Out(LIFO) as one of their valuation method. Same as KFC’s motto “Fresh, Fast and Tasty”. KFC restaurant would use the LIFO method on their bread. Bread that they bought in last will be sold to their customer first, making bread that sold out always fresh. For those bread which didn’t sold out or put in their restaurent for more than 1 day will be dispose. And a new batch of bread will be bought in. http://www.bursamalaysia.com/market/listed-companies/company-announcements/933217 Document of Financial Statement
i)Source Document
MEMO

TO: Accounting Department

FROM: Finance Manager

DATE:31 Jan 2011

SUBJECT: Inventory as at 31 Jan 2011

The following is the total inventory counted and amounted :

Chicken Meat 46864 kg x RM 5=RM234322

Regards,

Mr. Lee

ii)Book of Prime Entry
General Ledger
Date
Particular

DR(RM)
CR(RM)

2011
DR Inventory

234322 31-Jan CR Manufacturing account

234322

Posting the inventory as at 31 Jan 2011
234322
234322

iii)Ledger

Inventory
Account

2011

RM
2011

RM
31-Jan
Manufacturing
234322
31-Jan bal c/d

234322

1-Feb bal b/d

234322

iv)Extract of Financial Statement

Manufacturing Account for the month ended 31 Jan 2011 (extract)

RM RM
Less: Closing inventory (234322)

Statement of Financial Position as at 31 Jan 2011 (extract)

RM RM RM

Current Assets
Inventory 234322

DEFINITION OF RELEVANT INFORMATION
INVENTORY
Inventory refers to all the products in a company that are ready for the business transaction with its customers in business. Inventories generally refer to the current assets that they are usually sold in a business cycle or within a year. For most of the company, inventory is the most costly current assets. Inventory commonly used to track the inventory costs. At the same time, inventory is also known as stock. Most of the inventory is kept in a store or factory in a given period of time. For example, the types of inventory of KFC includes raw materials, poultry, equipments, advertising materials and finished goods. http://en.wikipedia.org/wiki/Inventory FIFO METHOD
FIFO Method (first-in, first-out) is one of the ways to determine inventory. Under FIFO, the oldest inventories or the first purchased inventories are usually sold first. As a result, the remaining inventories are the most recent purchases. Most companies that selling unpreserved goods such as food and drugs tend to use this method because the cash flow will resemble closely goods flow with this method. During inflation, the cost of purchases will rise. FIFO method uses the lower cost of goods sold and higher costs to the goods remain in the inventory. In addition, FIFO will make a business to report higher profit as this method using the lower cost of goods sold. http://www.investopedia.com/articles/02/060502.asp#axzz29LFajfy7 LIFO METHOD
The Word LIFO also stands for Last In First Out. Its means by newest inventory that a company bought in will be sell out first, while older inventory will be dispose. Due to the rising price, LIFO will record the selling of the most expensive inventory. In LIFO method, the profits need to base on the current market condition. The cost allocated to the cost of goods sold fairly current as they replicate the most current purchases in LIFO method. http://www.askdeb.com/inventory-management/accounting/fifo-lifo/ CONCLUSION
In conclusion, we get a lot of experience in doing the assignment for the Fundamental of Accounting. First of all, we learnt to find information using internet and books in the library. Apart from that, we also learnt to communicate with each other during the discussion of the assignment. We cooperated well with our group members and done this assignment effectively.
When doing the assignment, we get the chance to learn all the inventories valuation method such as FIFO, WAC and LIFO that help to calculate a company’s profit accurately. Besides that, we also get the opportunities to know more local company's background and some basic information. For example, we get to know the history of KFC company. Other than that, we also understand and know how the KFC company valuate their inventories which is FIFO method.

In addition, we would like to thank our tutor, Ms Michelle Tan and our lecturer, Ms Tracy Leong as they gave us the instructions and taught us how to do our assignments. Furthermore, we also want to thank our parents who always encourage us when doing our assignment. Lastly, we would like to thank our friends who give us many suggestion during the progress of doing this assignment.

Reference
Internet
Annual Report KFC Holdings (Malaysia) Bhd 2011, view on 6 October. Available on http://www.bursamalaysia.com/market/listed-companies/company-announcements/933217
Types of Inventory, Ingredient guide 2012, view on 7 October 2012. Available from http://www.kfc.com/nutrition/pdf/kfc_ingredients_sept12.pdf
Type of inventory poultry Integration ,by KFC Holdings (Malaysia) Berhad,view on 7 october 2012 Available on http://www.kfcholdings.com.my/English/Flashsite/BusinessUnits/BizU_Poultry_Integration.asp
KFC Colonel’s Story by KFC Holdings (Malaysia) Bhd 2011. View on 7 October 2012,Available on http://www.kfc.com.my/about-colonel-story.php
History KFC by KFC Holdings (Malaysia) Bhd. View on 7October 2012. Available on http://www.kfc.com/about/history.asp
FIFO and LIFO Inventory Cost Method, http://biztaxlaw.about.com/od/glossaryf/g/fifo.htm , by Jean Murray view on 8 October 2012
FIFO and LIFO Accounting, http://en.wikipedia.org/wiki/FIFO_and_LIFO_accounting ,The RMA Journal by Gibson SC, (2002) view on 8 October 2012
Inventory Accounting Methods, http://www.referenceforbusiness.com/encyclopedia/Int-Jun/Inventory-Accounting.html , William H. Coyle , updated by Karl Heil, view on 8 October 2012
FIFO Versus LIFO Accounting, by Doug Brinlee, view on 9 October 2012. http://www.askdeb.com/inventory-management/accounting/fifo-lifo/

Inventory valuation 2012, view on 8 October 2012. Available from http://en.wikipedia.org/wiki/Inventory_valuation
Basic Accounting Inventory Accounting BusinessTown.com 2001-2003 , view on 8 October 2012. Available from http://www.businesstown.com/accounting/basic-inventory.asp .
Inventory Valuation For Investors: FIFO And LIFO file under 6 August 2010, view on 8 October 2012. Availaible from http://www.investopedia.com/articles/02/060502.asp#axzz299doOFLx
Lower of Cost or Market (LCM) and Net realizable value (NRV), view on 9 October 2012,by Harold Averkamp formed AccountingCoach.com in 2003.Available from http://www.accountingcoach.com/online-accounting-course/27Xpg01.html
Definition Lower of Cost or Market (LCM) , view on 9 October 2012, by swathen. Modified on 2010. Available from http://www.wikicfo.com/Wiki/Default.aspx?Page=Lower-of-Cost-or-Market-LCM HYPERLINK "http://www.wikicfo.com/Wiki/Default.aspx?Page=Lower-of-Cost-or-Market-LCM&NS=&AspxAutoDetectCookieSupport=1"& HYPERLINK "http://www.wikicfo.com/Wiki/Default.aspx?Page=Lower-of-Cost-or-Market-LCM&NS=&AspxAutoDetectCookieSupport=1"NS= HYPERLINK "http://www.wikicfo.com/Wiki/Default.aspx?Page=Lower-of-Cost-or-Market-LCM&NS=&AspxAutoDetectCookieSupport=1"& HYPERLINK "http://www.wikicfo.com/Wiki/Default.aspx?Page=Lower-of-Cost-or-Market-LCM&NS=&AspxAutoDetectCookieSupport=1"AspxAutoDetectCookieS HYPERLINK "http://www.wikicfo.com/Wiki/Default.aspx?Page=Lower-of-Cost-or-Market-LCM&NS=&AspxAutoDetectCookieSupport=1"upport=1
Kentucky Fried Chicken, http://www.food-allied.com/en/kentucky_Fried_Chicken.aspx
Poultry ,view on 10 October 2012.Available on http://en.wikipedia.org/wiki/Poultry
Final Good, view on 12 October 2012.Available on http://en.wikipedia.org/wiki/Final_goods
Reference
Book
FIFO Inventory Cost Method Chapter 8, Page351,Financial Accounting Including International Financial Reporting Standards(IFRS) by Jan R.Williams , Susan F.Haka, Mark S.Bettner, Joseph V.Carcello, Nelson C.Y.Lam and Peter T.Y.Lau, Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc.,1221 Avenue of the Americas, New York,NY,10020.
LIFO Inventory Cost Method Chapter 8, Page 352, Financial Accounting Including International Financial Reporting Standards(IFRS) by Jan R.Williams , Susan F.Haka, Mark S.Bettner, Joseph V.Carcello, Nelson C.Y.Lam and Peter T.Y.Lau, Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc.,1221 Avenue of the Americas, New York,NY,10020.
The Lower-of-Cost (LCM) and Net-Realizable-Value ( NRV) Rule, Chapter 8, Page 355-356. Financial Accounting Including International Financial Reporting Standards(IFRS) by Jan R.Williams , Susan F.Haka, Mark S.Bettner, Joseph V.Carcello, Nelson C.Y.Lam and Peter T.Y.Lau, Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc.,1221 Avenue of the Americas, New York,NY,10020.