Programme: BTEC Higher National Diploma (HND) in Business (RQF).
Unit Number and Title: Unit 05 Accounting Principles
Unit Level: 04
Unit Lecturer: Omolade Eruotor
Lecturer’s Email o.eruotor@lcc.ac.uk
Assignment Title Financial Statement of Organization
Programme Coordinator: Mohammad Mahbubul Haque
Email: mm.haque@lcc.ac.uk
Academic Year 2024- 2025
Issue date: 05/09/2024
Submission date: 30/11/2024
Result Published
Date:
19/12/2024
Submission Format
The submission format is in the form of a blog post. The blog post should be written in a concise style. You are required to use headings, paragraphs, and sub-sections as appropriate.
All work must be supported with research and referenced using the Harvard referencing system. Inaccurate referencing use may lead to plagiarism issues if not applied correctly.
The recommended word limit is 2,500–3,000 words, although you will not be penalised for going under or exceeding the total word limit.
Unit Learning Outcome
LO1 Examine the context and purpose of accounting.
LO2 Prepare basic financial statements for unincorporated and small business organisations following accounting principles, conventions and standards.
LO3 Interpret financial statements.
LO4 Prepare budgets for planning, control and decision-making using spreadsheets.
Transferable skills and competencies developed
Students will have a proper understanding of accounting and the use of accounting in profit and non-profit organisations. The assignment will give a student a clear goal on what to do when
working in an accounting department.
●Students will also have the skills to generate basic financial statements from trial balances and produce accurate reports.
●Students will properly understand why the financial statements need to be interpreted for the investors, stakeholders, and stockholders and how to solve financial information to make informed decisions. Students will be able to prepare austere cash budgets. These are fundamental accounting skills one needs to have.
Vocational scenario
You currently work as an Assistant Accountant at Horizon Accounting Solutions (or your chosen organization), a growing firm that has steadily expanded its client base, primarily serving sole traders, partnership businesses, and non-profit organisations. Over the past year, the firm generated £30 million in revenue and is now targeting an ambitious goal of reaching £50 million this year.
In your role, you contribute to the company’s growth by conducting financial analysis, comparing performance data from different years, and preparing budgets to ensure the firm meets its financial benchmarks.
Recently, your supervisor, who is also one of the managers, assigned you the task of writing a blog post on the context and purpose of accounting. This post is designed to attract entrepreneurs and newly established businesses, helping them understand the crucial role accounting plays in their success.
Assignment activity and guidance
This blog post will contain topics like:
1.Examine the purpose of the accounting function within any organisation.
2.Assess the accounting function within the organisation in the context of regulatory and ethical constraints.
3.Evaluate the context and purpose of the accounting function.
4.Critically evaluate the role of accounting in informing decision-making to meet organisational stakeholders within complex operating environments.
5.You will prepare basic financial statements for a sole trader from the given trial balance of Sarah Thompson's business, as of 30 June 2024, the end of her financial year.
Sarah Thompson
Trial Balance As Of 30th June 2024
Account List Dr Cr
Property at Cost £150,000
Equipment at Cost £70,000
Provision for Depreciation (as at 1st July 2023) – On Property £22,500
On Equipment £12,000
Purchases £300,000
Sales £500,000
Inventory (as at 1st July 2023) £60,000
Discount Allowed £10,000
Discount Received £5,000
Returns Out £20,000
Wages and Salaries £70,000
Irrecoverable Debts £3,500
Loan Interest £6,000
Other Operating Expenses £25,000
Trade Payables £40,000
Trade Receivables £45,000
Cash in Hand £500
Bank £1,000
Drawings £30,000
Allowance for Receivables £800
15% Long Term Loan £50,000
Capital (as of 1 July 2023) £135,000
Total £750,000 £750,000
The following additional information as of 30 June 2024 is available:
1.At the close of business, inventory has been valued at £55,000.
2.Wages and salaries need to be accrued by £1,200.
3.Other operating expenses are prepaid by £400.
4.The allowance for receivables is to be adjusted to 3% of trade receivables.
5.Depreciation for the year ended 30 June 2024 is to be provided as follows:
oProperty: 2% per annum using the straight-line method.
oEquipment: 20% per annum using the straight-line method.
Your task is to:
Prepare Sarah Thompson’s statement of profit or loss for the year ended 30 June 2024.
Prepare her statement of financial position as of that date, using the appropriate adjustments.
Financial Statement Preparation for Green Valley Farm
You will prepare basic financial statements for a partnership business from the given trial balance of Green Valley Farm, as of 31 December 2024, the end of their financial year.
Green Valley Farm
Trial Balance As Of 31 December 2024
Account List Dr Cr
Capital on 1st January 2024 £30,500
Receivables £50,000
Cash in hand £2,000
Payables £40,000
Equipment at cost £60,000
Discount Allowed £2,000
Discount Received £1,500
Inventory on 1st January 2024 £22,000
Sales £600,000
Purchases £420,000
Vehicles at Cost £50,000
Utilities £8,000
Fuel Expenses £3,500
Rent £10,000
General Expenses £5,000
Bank Overdraft £25,000
Provision for depreciation – Equipment £6,000
Vehicles £10,000
Drawings £28,000
Total £700,000 £700,000
The following additional information as of 31 December 2024 is also available:
a)£300 is owed for fuel expenses.
b)£900 has been prepaid for rent.
c)Depreciation is to be provided for the year as follows:
Vehicles: 15%
Equipment: 10%
d)Inventory at the close of business was valued at £24,000.
Your task is to:
Prepare Green Valley Farm's statement of profit or loss for the year ended 31 December 2024.
Prepare their statement of financial position as of that date, using the appropriate adjustments.
Produce Donald Brown Brother’s statement of profit or loss and financial position for the year ended 31 December 2023, making appropriate adjustments.
Financial Statement Preparation for Harmony Community Center
You will prepare basic financial statements for a non-profit organization from the given trial balance of Harmony Community Center, as of 31 December 2023.
Harmony Community Center
Trial Balance As Of 31 December 2023
Account List Dr Cr
Cash £12,000
Accounts Receivable £3,000
Prepaid Expenses £700
Investments £20,000
Property, Plant and Equipment £30,000
Accounts Payable £1,500
Accrued Liabilities £800
Deferred Revenue £4,000
Withdraw £12,000
Contributions £70,000
Grants £20,000
Membership Dues £3,500
Program Service Revenue £25,000
Program Expenses £30,000
Administrative Expenses £6,000
Fundraising Expenses £3,000
Total £100,700 £100,700
The following additional information as of 31 December 2023 is also available:
a)£400 is owed for program expenses.
b)£1,000 has been prepaid for administrative expenses.
c)Depreciation for the year is to be provided on property, plant, and equipment at 5%.
d)Inventory of supplies on hand at year-end is valued at £1,500.
Your task is to:
Prepare Harmony Community Center’s statement of profit or loss for the year ended 31 December 2023.
Prepare their statement of financial position as of that date, using the appropriate adjustments.
6.Choose any organization (public or private) whose financial statements are publicly available. This could be a corporation, a non-profit, or any other type of business that interests you. Access the annual financial statements of your chosen organization for the years 2022-23 and 2023-24. Ensure you have both the statement of profit or loss and the statement of financial position.
a)You are required to calculate & present following ratios:
Profit Margin Ratios.
Debt-Equity Ratios.
Return on Investment (ROI) Ratios.
Current Ratios
b)You are also required to compare and evaluate the performance over time using financial ratios concerning relevant benchmarks.
c)Critically evaluate information from financial statements to assess organisational performance using measures and benchmarks to make justified conclusions.
7.Prepare a cash budget for XYZ Ltd for the period from January to April using the provided sales, purchase, and wages data. Additionally, evaluate the benefits and limitations of budgets and budgetary planning and control for an organisation.
Month Expected Sales (£) Expected Purchase (£)
Jan 60,000 48,000
Feb 40,000 80,000
Mar 45,000 81,000
Apr 40,000 90,000
Data Provided:
Month Expected Sales (£) Expected Purchase (£)
Jan 60,000 48,000
Feb 40,000 80,000
Mar 45,000 81,000
Apr 40,000 90,000
Wages: £5,000 per month.
Bank Balance on 1st January: £8,000. Management's Fund Deficit Decisions:
1.If the deficit fund is within the limit of £10,000: Negotiation with the bank is an option.
2.If the deficit fund exceeds £10,000 but is within £42,000: The issue of debentures is preferred.
3.If the deficit fund exceeds £42,000: The issue of shares is preferred (within authorised capital limits).
8. Upon preparing a cash budget from the information above, identify corrective actions to problems revealed by budgetary planning and control and justify budgetary control solutions and their impact on organisational decision-making to ensure efficient and effective deployment of resources.
Learning Outcomes and Assessment Criteri
Pass Merit Distinction
LO1 Examine the context and purpose of accounting
D1 Critically evaluate the role of accounting in informing decision-making to meet organisational, stakeholder and societal needs within complex operating environments.
P1 Examine the purpose of the accounting function within an organisation.
P2 Assess the accounting function within the organisation in the context of regulatory and ethical constraints.
M1 Evaluate the context and purpose of the accounting function in meeting organisational, stakeholder and societal needs and expectations.
LO2 Prepare basic financial statements for unincorporated and small business organisations following accounting principles, conventions and standards.
LO2 and LO3
D2 Critically evaluate financial statements to assess organisational performance using measures and benchmarks to make justified conclusions.
P3 Prepare financial statements from a given trial balance for sole traders, partnerships and not-for-profit organisations to meet accounting principles, conventions and standards. M2 Produce financial statements from a given trial balance, making appropriate adjustments.
LO3 Interpret financial statements
P4 Calculate and present financial ratios from a set of final accounts.
P5 Compare the performance of an organisation over time using financial ratios.
M3 Evaluate the performance of an organisation over time by using financial ratios concerning relevant benchmarks.
LO4 Prepare budgets for planning, control and decision- making using spreadsheets.
D3 Justify budgetary control solutions and their impact on organisational decision-making to ensure efficient and effective deployment of resources.
P6 Prepare a cash budget from given data for an organisation using a spreadsheet.
P7 Discuss the benefits and limitations of budgets and budgetary planning and control for an organisation.
M4 Identify corrective actions to problems revealed by budgetary planning and control for effective organisational decision-making.
ACCA Interactive Text, FIA Financial Accounting. Pub: BPP Learning Media.
ACCA Interactive Text, FIA Management Accounting. Pub: BPP Learning Media.
Websites
www.accountingcoach.com - Accounting Coach, online free courses.
Links
This unit links to the following related units: Unit 10: Recording Financial Transaction Unit 21: Financial Reporting
Unit 22: Management Accounting Unit 23: Financial Management
Unit 29: Managing and Running a Small Business
If you need Assignment for Australia university , So Check here - Punjab Assignment help
Comments
Post a Comment