Billabong BY pooja275 Answer 3 AUDIT FIRM As per the Judicial obligation, Billabong International Limited appointed Pricewaterhouse Coopers as their audit firm. PWC is a London based multinational company known for its Professional Services. As an audit firm for Billabong, Pricewaterhouse reviews the company’s accounting statements and determines the company’s financial position. The lead auditor for Billabong is Steven BosilJevac. Steven BosilJevac is a partner at Pricewaterhouse Coopers. (Billabong Financial Report, 2013: 43) Answer 8 DEPRECIATION Land and building are shown at cost.
Consecutive prices are encompassed in the asset’s carrying number or recognised as a distinct asset, as appropriate, merely after it is probable that upcoming commercial benefits associated alongside the item will flow to the group and the price of the item can be measured reliably. All repairs and maintenance are charged to the income statement across the commercial era in that they are incurred. Accumulated depreciation – Buildings 20-40 years – Owned and leased plant and equipment 3-20 years – Furniture, fittings and equipment 3-20 years Land has not been depreciated.
Building, plant and equipment and furniture, fittings and equipment have been depreciated using the straight-line method. This method has been used to allocate the assets’ cost net of their residual values and over the period of their estimated useful lives. Total depreciation as of June 2013 stands at $34,866. Depreciation on building is $1,520, on plant and equipment is $31,919 and Plant and equipment under finance lease is $ 1,427. (Billabong Financial Report, 2013) Answer 9 Long-Term Liabilities Total long-term liabilities for Billabong International Limited amount to $239,250.
This onsists of borrowings, deferred tax liabilities, provisions and other non-current liabilities. Borrowings account for the largest portion of the long-term liabilities. The total amount under borrowings sums up to $205,942. Other non- current liabilities liabilities have decreased from the financial year 2012 to the year 2013. (Billabong Financial Report, 2013) Answer 12 Current Ratio Current ratio is mainly concerned with a firm’s current assets and current liabilities. Current assets are those assets in a firms balance sheet that can be easily converted into cash within a short time frame. Eg. Accounts receivable.
Current liabilities are those liabilities that are to be cleared within the time span of a year. Eg. Accounts payable. Current Ratio determines whether a firm has the ability to pay off its current liabilities. A ratio of 1:1 shows that current liabilities can be paid off using all of the current assets of the firm. A ratio higher than 1:1 shows that liabilities can be paid off without using all of the Current Assets. Whereas, a ratio less than 1:1 implies that the current assets of the firm are not enough to clear current liabilities. Current Ratio = Current assets / Current liabilities Billabongs Current Ratio :
Current Asset/ Current Liabilities = 289,853/ 258,609 = 1. 12 : 1 Billabong International Limited has a current ratio of 1. 12 : 1. This indicates that Billabong will be able to clear its current liabilities using the current assets. However, this ratio also indicates that after clearing the current liabilities, Billabong will not be left with an adulatory amount of current assets. Reference list : Billabong Financial Report, 2013 : http://www. billabongbiz. com/phoenix. zhtml? c=1 reportsannual Farmdocdaily, Current Ratio : http://farmdocdaily. illinois. edu/2012/08/farm-liquidity—your-current. html