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Assignment Front Sheet

Qualification

Unit number and title

Pearson BTEC Level 5,


HND Business (Accounting)

Unit 10: Financial Accounting and Reporting


Unit code: F/601/0864
Credit value: 15 credits

Student name

Assessor name
Sajid Saeed Khan

Date issued

Completion date

Submitted on

Validity

3rd December 2013

3rd January 2014

Assignment title

Preparation of financial statements, complying with relevant legal and


regulatory provisions

Assignment no

10- F/601/0864-13IND

3rd April 2014

Hand-in Policy
You must complete this assignment on time. If you experience difficulties, you must inform your tutor
accordingly.
Late Work Policy
Consideration will be given to students who have valid reasons for late submission (eg, illness).
Plagiarism
In cases of plagiarism, college regulations will be applied. You must declare that this assessment is your own
work by signing the following statement:

Learner declaration
I certify that the work submitted for this assignment is my own and research sources are fully
acknowledged.
Student signature:

Date:

Assessment Criteria
Learning
Outcome

LO1

LO2

LO3

LO4

Learning
outcome

Understand the
regulatory
framework for
financial
reporting

Be able to
prepare
financial
statements
from complete
or incomplete
records
Be able to
present
financial
information in
accepted
formats for
publication
Be able to
interpret
financial
Statements

Assessme
nt Criteria

In this assessment you will have the


opportunity to present evidence that
shows you are able to:

Task Evidence
no. (Page no)

1.1

Describe the different users of financial


statements and their needs

1.2

Explain the legal and regulatory influences on


financial statements

1.3

Assess the implications for users

1.4

Explain how different laws/regulations are dealt


with by accounting and reporting standards

2.1

Prepare financial statements for a variety of


businesses from a trial balance, making
appropriate adjustments

2.2

Prepare financial statements from incomplete


records

2.3

Prepare a consolidated balance sheet and profit


and loss account for a simple group of
companies

3.1

Explain how the information needs of different


user groups vary

3.2

Prepare financial statements in a form suitable


for publication by a sole trader, partnership and
limited company

4.1

Calculate accounting ratios to assess the


performance and position of a business

4.2

Prepare a report incorporating and interpreting


accounting ratios, including suitable
comparisons

2,4

In addition to the above PASS criteria, this assignment gives you the opportunity to submit evidence in order to achieve the following MERIT
and DISTINCTION grades
Grade Descriptor

Indicative characteristic/s

M1 Identify and apply strategies to find


appropriate solutions

To achieve M1, an effective approach to study and


research has been applied (Task 1)
Effective judgements have been made.
An effective approach to study and research
has been applied.

M2 Select / design and apply appropriate


methods / techniques

A range of sources of information has been


used
a range of methods and techniques have been
applied
Complex information/data has been
synthesised and processed

M3 Present and communicate appropriate


findings
Coherent, logical development of
principles/concepts for the intended audience
D1 Use critical reflection to evaluate own
work and justify valid conclusions

Conclusions have been arrived at through


synthesis of ideas and have been justified
The validity of results has been evaluated using
defined criteria

D2 Take responsibility for managing and


organising activities

Contextualisation

Autonomy/independence has been


demonstrated
Activities have been managed

To achieve M1, an effective approach to study and


research has been applied. (Task 2)
To achieve M1, an effective approach to study and
research has been applied. (Task 3)
To achieve M1, effective judgements have been made
(Task 4)
To achieve M1, effective judgements have been made.
(Task 5)
To achieve M2 a range of sources of information has been
used. (Task 2)
To achieve M2, complex information/data has been
synthesised and processed (Task 3)
To achieve M2 a range of methods and techniques have
been applied (Task 4)
To achieve M2, relevant theories and techniques have
been applied (Task 5)
To achieve M3, coherent, logical development of
principles/concepts for the intended audience. (Task 1)

To achieve D1, conclusions have been arrived at through


synthesis of ideas and have been justified. (Task 1)
To achieve D1 the validity of results has been evaluated
using defined criteria. (Task 2)
To achieve D2, autonomy/independence
demonstrated. (Task 1)
To achieve D2, autonomy/independence
demonstrated. (Task 2)

has

been

has

been

To Achieve D2 autonomy/independence has been


demonstrated. (Task 3)
To Achieve D2 autonomy/independence has been
demonstrated. (Task 4)
To achieve D2, autonomy/independence has been
demonstrated, activities have been managed (Task 5)
D3 Demonstrate convergent /lateral /
creative thinking

Assignment brief
Unit Name number and
title

Unit 10: Financial Accounting and Reporting


Unit code: F/601/0864
Credit value: 15 credits

Qualification

Pearson BTEC Level 5, HND Business (Accounting)

Start date

3rd December 2013

Deadline/hand-in

3rd January 2014

Assessor

Sajid Saeed Khan

Assignment title

Preparation of financial statements, complying with relevant legal and


regulatory provisions

Task 1 (LO1, 1.1, 1.2, 1.3, 1.4 and M1, M3, D1 and D2)
You are working as a Senior Accounts Manager in a joint stock company, ABC Limited. Your company is
conducting a seminar on the topic of Understand the regulatory framework for financial reporting. You
have been asked to present the following on behalf of your company:
1. Prepare a presentation on the topic Users of financial statements and their needs''.
2. Prepare and present a detailed report on the following:
a) Explain the legal and regulatory influences on financial statements and assess its implications
for different users?
b) Explain in detail how different laws/regulations are dealt with by accounting and reporting
standards?

Task 2 (LO2, 2.1, 2.2 and M1, M2, D1, D2)


Mr. Shujrah run a small business for many years, he has never kept adequate accounting records. He
requires final accounts for the year ended 31 August 2003 to obtain a bank loan for the expansion of
the business. As a result, the following information has been obtained after a careful research:
All takings have been banked after deducting; cash drawings of 8,000, labour of 1,200 and Purchase
of goods for resale for 1,800. (Takings have been the source of all amounts banked). Gross profit of
33(1/3) % on cost has been obtained on all goods sold. Despite the availability of minimum accounting
records, Mr. Shujrah confirmed that he has taken goods costing 600 out of the business during the
year for his own use.
Mr. Shujrahs business assets and liabilities are as follows:

As at

'1 September 2002

'31August 2003

Stock in trade

8,600

16,800

Debtors for sales

3,900

4,300

Creditors for purchases

7,400

8,900

Rent prepaid

300

420

Electricity accrued

210

160

2,300

1,650

360

330

Balance at bank
Cash in hand

Bank payments during the year ended 31 August 2003 have been summarized as follows:

Purchases

101,500

Rent

5,040

Electricity

1,390

Delivery costs (to


customers)

3,000

Casual labour

6,620

Required:
(a) Calculate total purchases for the year ended 31 August 2003.
(b) Prepare a trading and profit and loss account for the year ended 31 August 2003 and a balance
sheet as at that date.
Task 3 (LO2: 2.3 and M1, M2, D2)
The following figures for the year to 30 September 1997 have been extracted from the books
and records of two companies, A-One Ltd and its subsidiary, B-One Ltd, which form a group:
Profit and Loss Accounts for the year to 30 September 1997

A-One Ltd
(In

B-One Ltd
(In Millions)

Turnover
Cost of sales
Gross profit
Administration expenses
Income from shares in group company
Profit on ordinary activities before taxation
Tax on profit on ordinary activities
Profit on ordinary activities after taxation
Dividends: paid
proposed
Retained profit for the year
Retained profit brought forward
Retained profit carried forward

Millions)
1,700
( 920)
780
(300)
120
600
( 30)
570
( 90)
(270)
210
220
430

450
(75)
375
(175)
___
200
(20)
180
(50)
(100)
30
70
100

Balance Sheets at 30 September 1997

Fixed tangible assets


Investments: Shares in group company
Current assets
Stocks
Debtors (including, for A-One Ltd,
The dividend proposed by the subsidiary)
Cash at bank and in hand
Creditors (amounts falling due within one
year)
Trade creditors
Other creditors, taxation and social security
Proposed dividend
Net current assets
Total assets less current liabilities
Provisions for liabilities and charges
Taxation, including deferred taxation
Capital and reserves
Called-up share capital (ordinary shares of
1 each)
Profit and loss account

A-One Ltd
(In Millions)
1,280
400

B-One Ltd
(In Millions)
440

300

250

280
40
620

150
10
410

(
(
(
(

80)
160)
270)
510)
110
1,790

(160)
( 70)
(100)
(330)
80
520

( 460)
1,330

( 20)
500

900
430
1,330

400
100
500

Additional information:
(a) A-One Ltd acquired 80 per cent of the shares in B-One Ltd on 1 October 1994. B-One Ltds
Profit and loss account balance as at that date was 40,000.
(b) Goodwill arising on acquisition is to be written off against the groups retained profits.
(c) A-One Ltd takes credit within its own books of account for any dividends receivable from
B-One Ltd.
Required:
Prepare A-One Ltd & its subsidiary B-One Ltd consolidated profit and loss account for the year to 30
September 1997 and a consolidated balance sheet as at that date.

Task 4 (LO2 2.1 and LO3, 3.1, 3.2and M1, M2, D2)
A). Explain the importance of financial information of the company for different stakeholders.
B). You are to draw up a trading and profit and loss account for the year ending 31 March 2012, and a
balance sheet as at that date from the following trial balance and details of:

Description
Bank

Amount in (000)
8,100

Debtors

321,219

Creditors

237,516

Stock at 31 March 2011

290,114

Buildings at cost

800,000

Equipment at cost

320,000

Profit and loss account as at 31 March 2011

136,204

General reserve

120,000

Foreign exchange reserve

20,000

Authorized and issued share capital

800,000

Purchases

810,613
1,606,086

Sales
Carriage inwards
Carriage outwards
Salaries
Business rates

2,390
13,410
384,500
14,800

Office expenses

9,100

Sundry expenses

2,360

Provisions for depreciation at 31 March 2011:


Buildings

80,000

Equipment

96,000

Directors remuneration
Notes at 31 March 2012:
1. Stock 317,426.
2.
3.
4.
5.

Business rates owing 1,700; Office expenses owing 245.


Dividend of 15 per cent proposed.
Transfers to reserves: General 70,000; Foreign exchange 30,000.
Depreciation on cost: Buildings 5 per cent; Equipment 15 per cent.

119,200

Task 5 (LO4, 4.1,4.2 and M1, M2, D2)


The following are the summarized Profit Statements and Balance Sheets for A2Z Motors Ltd, a
manufacturing company, and Fashion Do-Do Ltd, a retailer.
A2Z Motors Ltd
2009
2010

Fashion Do-Do Ltd


2009
2010

000

000

000

000

500

610

425

460

Cost of sales

(245)

(355)

(210)

(230)

Operating costs

(225)

(230)

(190)

(200)

Loan interest paid

(7)

(10)

(7)

(3)

Net profit

23

15

18

27

150

225

220

175

Stock

50

60

27

20

Debtors

20

30

Bank

10

(35)

13

57

(25)

(20)

(35)

(50)

205

260

225

202

Share capital

50

50

50

50

Retained profit

95

110

100

127

Long term loans

60

100

75

25

205

260

225

202

Sales

Fixed Assets at Net Book


Value

Creditors

Required
1. Use ratios to compare the managements performance from 2009 to 2010 for each company. (Use
year ended figures to calculate ratios)
2. Prepare a report incorporating and interpreting accounting ratios, suitable comparisons, weaknesses
and limitations of ratio analysis.

Evidence
checklist

Summary of evidence required by student

Task 1

Presentation on the topic Users of financial statements and their needs''


and report on legal and regulatory influences on financial statements

Task 2

Calculate total purchases and prepare a trading and profit and loss account

Task 3

Prepare A-One Ltd & its subsidiary B-One Ltd consolidated profit and loss
account

Task 4

Task 5

Report on the importance of financial information of the company for


different stakeholders and draw up a trading and profit and loss account for
the year
Comparison of the managements performance and prepare a report
incorporating and interpreting accounting ratios, suitable comparisons,
weaknesses and limitations of ratio analysis.

Evidence
presented

Submission guidelines
You must:
Complete all tasks
Present your work in one business report-style document which should include a table of contents,
references list, foot or end notes if any and appendices if any.
Complete, sign and submit the usual statement of authenticity.
Submit your work in a single word processed document of 4000-5000 approx .words. This word limit is
only for guidance and is not applied on grading.
Produce clear specific reasoning and arguments in support of your answers.
Make appropriate reference to the relevant concepts, techniques and theories.
Appropriately cite all information success (in the text and bibliography) as per references guidelines
given to you before.

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