AC4052QA Financial Accounting – NOV22 INTAKE Assignment Brief
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Deadline: Monday 13 March 2023 on or before 3pm
AC4052QA Financial Accounting – NOV22INTAKE
Assessment Component: Coursework
Weighting: This Coursework contributes 100% to the Overall Module Mark
Word count: 1500 words Max
Submission: Students to submit to Turnitin via module Weblearn
INSTRUCTIONS
This coursework has three sections questions.
1. Answer all question
2. Show all working out.
3. You must show all working out. You may use Excel, but you must show the formula for the
excel calculations
4. Do not include the assessment questions
AC4052QA Financial Accounting – NOV22 INTAKE Assignment Brief
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Academic Integrity and Plagiarism
Academic integrity requires honesty in your studies. You should not present another person’s
sentences or ideas as your own work. You should clearly identify quotations through the use of
quotation marks and references to the sources. Failure to adhere to these academic standards may lead
to allegations of academic misconduct, which will be investigated by the Academic Integrity team at
QA.
Academic misconduct covers a variety of practices, such as:
Plagiarism: copying another person’s ideas or words and presenting them as your own work,
without the use of quotation marks and/or references.
Self-plagiarism: reproducing parts of one of your assignments in another piece of work.
Inventing, altering or falsifying the results of experiments or research.
Commissioning another person to complete an assessment.
Collaborating with others in the production of a piece of assessed work which is presented as
entirely your own work.
Cheating in an exam (e.g. by taking revision notes into the exam room).
Ghosting ( e.g you buy a piece of work )
For full details of academic misconduct and how allegations are investigated, see the relevant
section of the University’s academic regulations: https://student.londonmet.ac.uk/yourstudies/student-administration/rules-and-regulations/academic-misconduct/
AC4052QA Financial Accounting – NOV22 INTAKE Assignment Brief
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SECTION A (30marks)
QUESTION 1
This assignment requires each student to work on the published financial statements of ASOS PLC for two
years from 2020 to 2021.
The figures below are extracted from ASOS 2020 and 2021 annual reports.
| 2021 | 2020 | |
| Income statement | £m | £m |
| Sales revenue | 3,911 | 3,264 |
| Cost of sales | 2,134 | 1,716 |
| Gross profit | 1,777 | 1,548 |
| Operating profit (use for PBIT) | 190 | 151 |
| Interest paid | 13 | 10 |
| Balance sheet | £m | £m |
| Non-current assets | 1,325 | 970 |
| Current assets | 1,560 | 1,020 |
| Inventories | 807 | 532 |
| Trade and other receivables | 58 | 60 |
| Current assets less inventories | 753 | 488 |
| Current liabilities | 998 | 818 |
| Trade and other payables | 956 | 770 |
| Non-current liabilities | 1,034 | 810 |
| Total equity | 1,034 | 810 |
| Capital employed | 2,068 | 1,620 |
You are required:
Write a brief report on the performance of ASOS over the financial periods 2020 to 2021.You
should use the financial statements provided above to calculate the required accounting ratios
shown below and use any other information relevant for your comments.
Information can be accessed from the annual report and accounts and any other source of evidence
that you believe helps to explain the company’s performance and position.
AC4052QA Financial Accounting – NOV22 INTAKE Assignment Brief
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Calculate the following ratios. Show all your working out
Long term financing ratio (2marks)
1.1 Gearing
Working capital Ratios (6marks)
1.2 Inventory days
1.3 Receivable days
1.4 Payable days
Liquidity Ratios (4marks)
1.5 Current ratio
1.6 Acid test
Profitability Ratios (6marks)
1.7 Return on capital employed
1.8 Net profit margin
1.9 Asset turnover
Interpretation (12marks)
Interpret the ratios above by making comparative relevant comments with clear demonstration of
understanding applied in context
Marking criteria for section A:
| Explanatory comments on the assessment criteria |
Maximum marks for each section Recommended marks |
|
| Assessment criteria: (Guidelines – suggested –under FOUR MAIN HEADINGS) |
||
| Correct answers with working out |
Calculations | (18 marks): 2marks each – 1mark for 2020, 1 mark for 2021. Maximum of 10marks without working out |
| Interpretation of ratios (comparative comments) |
Relevance, clear demonstration of understanding and applied in context |
(9 Marks): 1marks for each specific ratio |
| Conclusion/ Recommendations and use of appropriate referencing as required by London met |
Identifying the key points raised | (3marks) |
AC4052QA Financial Accounting – NOV22 INTAKE Assignment Brief
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SECTION B (70marks)
Question 2 (58 marks)
The following additional information as of 31 December 2022 should be taken into account:
(i) Inventory was valued at £150,000
(ii) Audit fees of £1000 were outstanding
(iii) Prepaid debenture interest is to be accounted for
(iv) Depreciation is to charge on buildings at 10% on the straight-line basis and on
fixtures and fittings at 20% on the reducing balance basis
(v) The directors decided to transfer £70,000 to the general reserve account
Required:
Prepare for Ana – Maria Plc:
(a) the statement of profit or loss for the year ended 31 December 2022
(b) the statement of changes in equity for the year ended 31 December 2022
(c) the statement of financial position for the year ended 31 December 2022
DR CR
Purchases 372,000
Trade payables 10,000
Salaries and wages 54,000
Directors’ remuneration 10,000
Audit fees 3,000
Heat and light 30,000
Inventory, 01 April 2021 130,000
Debenture Interest 27,000
Interim dividend paid 120,000
Building at cost 500,000
Building – accumulated depreciation 01 Dec 2021 50,000
Fixtures and fittings at cost 150,000
Fixtures and fittings – accumulated depreciation, 01 Dec 2021 20,000
10% Debentures 220,000
Ordinary share capital (fully paid) 800,000
Trade receivables 120,000
Bank 260,000
Sales 940,000
Share premium account 150,000
Retained earnings 120,000
Communications expenses 20,000
General reserve 57,000
Long-term investments 571,000
2,367,000 2,367,000
Ana-maria Tial Balance
The following balances were extracted from the accounting records of Ana- maria Plc
Trial Balance as of 31 November 2022
AC4052QA Financial Accounting – NOV22 INTAKE Assignment Brief
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Question 3 (12Marks)
Elena Ltd, a new business, starts trading in sports shoes on 1st January 2021 and expects to make the
following transactions for the 6 months ending 30th June2021:
| (i) | Sales are expected to be 500 units (sports shoes) per month for the 4months from January to April then 300 units per month from May to June. |
(ii) The selling price will be £60 per unit.
(iii) All sales will be cash sales with cash received in the same month the sale takes place.
| (iv) | Payment for Purchases of inventory (sports shoes) will take place on the month after receiving the inventory. Each unit of inventory will cost £40. |
| (v) | Wages are expected to be £1000 per month and will be paid in the month in which they are incurred. |
| (vi) | Rent will be £2000 per month to be paid quarterly in advance (i.e., the rent payment for January, February and March 2021 will be made on 1st January 2021). |
| (vii) | General overheads are expected to cost £1000 per month and will be paid in the month in which they are incurred. |
(viii) Bought a laptop for the business in April for £1,500
Required
a) Prepare a cash budget for the 6 months from January to June 2021. Show the cash receipts
and cash payments the business expects to have each month and the cash balance at the end of each
month. (7marks)
| b) . |
Prepare a profit budget for the 6 months ending 30th June 2021. (5marks) |