Assume that you are a team of graduate accountants working for Hitech Group Ltd, an independent consulting & accounting firm Situated at 111 George Avenue, Melbourne, VIC 3000. The Manager of your...

1 answer below »
Assume that you are a team of graduate accountants working for Hitech Group Ltd, an independent
consulting & accounting firm Situated at 111 George Avenue, Melbourne, VIC 3000. The Manager of your
firm, Ms. Araneda Jackson has asked you to draft a letter in response to an email received from Mr. Jason
Alba, the General Manager of Qantas Airway Ltd, raising accounting issues – see the copy of the email
on the next page.
The maximum length for the body of the letter is 1,500 words. You should address all the technical
issues/discussion in the letter, followed by a Reference List.
• Part A: Technical component 10% - This mark covers the technical content of your advice and
the explanation on each of the issues, the calculations, and the sources used.
• Part B: Communication Skills – Letter Writing 5% - This mark covers the generic skills of Letter writing; layout, clear meaning, structure and organisation, appropriate tone and grammar, spelling, and punctuation, etc.throughout the whole assignment.Re: Accounting Issues: Year Ending 30 June 2021
From: Jason Alba ( XXXXXXXXXX)
Sent: 20 March 2021
To: Araneda Jackson ( XXXXXXXXXX)
Dear Araneda,
Thank you for your phone call this morning, as agreed I am emailing you regarding the accounting
issues we briefly discussed. By the way to assist the Management team in our decision-making
process, could you please make sure you reference any relevant sources relating to your advice, for
example, AASBs, Corporations Act, and relevant websites?
Here is the background to our problem – like every airline in the world, COVID has severely
impacted QANTAS, and we have experienced huge volatility in our monthly revenue. Due to the
sudden closure of international borders (and subsequently the domestic borders); QANTAS has to
refund the fares to everyone who had bought a refundable ticket and was eligible for a refund.
QANTAS has initially recognised the receipt of cash as revenue (when the customer made the
booking), and now the refunds have been recognised as a “sales return”. We have obviously kept
the money from customers who weren’t eligible for a refund. Is this all okay? Should we do anything
differently? Are there any tax consequences?
On the other side, we had to defer the payments of several expenses and costs due to lack of cash
on hand. We are in ongoing negotiations with the Commonwealth Government to provide us with a
support package so that we can meet all our financial obligations for the next two years. The exact
details are yet to be finalised, but this support package will likely be an interest-free loan for about
ten years. Could you please suggest what we should do about these expenses that we haven’t paid
yet? Can we recognise this support package as a gift from the government because it is interestfree?
Please respond by letter (not email) as I would like to present your views to our board.
I look forward to hearing from you shortly.
Regards
Jason Alba
General Manager, Qantas Airways Ltd
Level 1, 222 King Street,
Sydney NSW 2000
Answered 7 days AfterMay 09, 2021

Solution

Angel answered on May 16 2021
23 Votes

HITECH GROUP LIMITED
111 George Avenue,
Melbourne VIC 3000
www.hitechgroup.com.au
16th May 2021
Mr Jason Alba
General Manager, Qantas Airways Ltd
Winton...

Submit New Assignment

Copy and Paste Your Assignment Here