COURSEWORK QUESTION PAPER: Re-Sit Spring 2023 Semester
| Module Code: AC4058NI Module Title: Financial Accounting Module Leader: |
| Coursework Type: Coursework 1500 words Task 1: 500 words Task 2: 1000 words Coursework Weight:This coursework accounts for 100% of your total module grades. Submission Date: TBA When Coursework is given out: TBA Submission Instructions:All the task needs to be submitted in a single file Final File Name: e.g. 18112074 Darshan Gyawali ANSWER ALL QUESTIONS IN ALL SECTIONS. Warning:London Metropolitan University and Islington College takes Plagiarism seriously. Offenders will be dealt with sternly. |
© London Metropolitan University
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Individual coursework 1: Coursework 1500 words (100 marks)
PLEASE READ THE FOLLOWING CAREFULLY
Section A: Learning Outcomes of the Assessment
Learning Outcome(s) addressed by this assessment:
LO 1. Construct a set of financial accounting statements for a sole trader and a limited company, starting from the double entry bookkeeping aspect of recording transactions.
LO 2. Understand and implement the underlying concepts/conventions and comment on the usefulness to users of financial statements prepared.
LO 3. Highlight the decision-making needs of external users of financial reports
Section B: Introduction
The module has one summative assessment. The assessment strategy for the module comprises a piece of coursework which will require students to produce a 1500 words individual piece of work on interpretation and computation of financial statements.
This task must represent the work of individual students and references to published works must be cited. Plagiarism constitutes an examination offence and if discovered will render a student(s) liable to the appropriate provisions of the University’s Examination Regulations.
Section C: Assessment Strategy
Task 1 – Construction of financial statements (Attempt all)
Question 1: Construction of the Statement of Comprehensive Income and Financial Position – 15 marks
Mr. Miran, Manager of Pikle Suppliers has suggested your name to the financial and advisory committee regarding preparation of set of financial statement of the year ended 31 December 2022 of M/S Pikle Suppliers.
| Dr | Cr | |
| £ | £ | |
| Debtors | 12,621 | |
| Directors’ Remuneration | 9,011 | |
| Electricity | 4,946 | |
| Audit and Accountancy | 1250 | |
| Carriage Outward | 995 | |
| Bank | 54,536 | |
| Creditors | 15,032 | |
| Long Term Bank Loan | 15,450 | |
| Sales | 450,500 | |
| Stock(at1.1.2022) | 15,690 | |
| Salaries and Wages | 19,050 | |
| Bank Interest | 2005 | |
| Insurance | 2,050 | |
| Fixture and Fittings | ||
| At Cost | 75,000 | |
| Accumulated depreciation(at1.1.2022) | 24,550 | |
| Motor Vehicle | ||
| At Cost | 37,550 | |
| Accumulated depreciation (at1.1.2022) | 3,560 |
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| Purchases | 330,500 | |
| Rent and rates | 7,800 | |
| Office expenses | 15,500 | |
| Ordinary £1 shares (issued and fully paid) | 38,900 | |
| Profit and loss account (at1.1.2022) | 40,512 | |
| Total | 588,504 | 588,504 |
Additional Information:
1. Stock at 31st December 2022 valued at cost amounted to £26,000.
2. Depreciation is to be provided on Office fittings at 30% on reducing balance method, 30% on straight line method for motor vehicle.
3. Provision is to be made for electricity for £1050
4. Insurance paid in advance at 31st December 2022 amounted to £7,500
Required tasks
1. Prepare Income statement for the year ended 31st December 2022.
2. Prepare Balance Sheet as at 31st December 2022.
3. Identify FIVE accounting concepts that have been applied in the preparation of financial Statements with the supporting evidences and also explain their meaning.
Question 2: Construction of the Statement of Cash Flow using Indirect Method – 15 marks
The following statements of financial positions for the year ended 31st December 2021 and 2022 have been prepared for Tinchuli Automation limited
| Statement of financial positions at: | 12/31/2022 | 12/31/2021 | ||
| £ | £ | £ | £ | |
| Non-current assets | ||||
| Plant and machinery at cost | 60,500 | 60,500 | ||
| Less: Depreciation | (13,600) | (10,500) | ||
| 46,900 | 50,000 | |||
| Investments at cost | 33,215 | 23,200 | ||
| Current assets | ||||
| Inventory | 18,125 | 22,500 | ||
| Trade receivables | 22,100 | 19,500 | ||
| Cash | – | 13,500 | ||
| Total Current assets | 40,225 | 55,500 | ||
| TOTAL | 120,340 | 128,700 | ||
| Capital and reserves | ||||
| Ordinary share capital | 25,600 | 25,600 | ||
| Share premium account | 11,200 | 11,200 | ||
| Retained earnings | 15,090 | 16,900 | ||
| Shareholders’ funds | 51,890 | 53,700 | ||
| Non-current liabilities | ||||
| Loans | 27,020 | 35,500 | ||
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Current liabilities
| Trade payables | 35,200 | 39,500 | ||
| Bank overdraft | 6,230 | – | ||
| Total Current Liabilities | 41,430 | 39,500 | ||
| TOTAL | 120,340 | 128,700 | ||
Additional information:
There were no purchases or sales of plant and machinery during the year.
Required
1. Ms Santa has asked you to prepare Tinchuli Automation Limited’s statement of cash flows using indirect method for the year ended 31st December 2022.
2. Write a short memo to Ms Tinchuli explaining the business performance findings of your statement of cash flow.
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Task 2 – 70 Marks (Attempt All)
Question 3: Understanding Business Performance using Financial Analysis – 60 marks
YOU ARE REQUIRED to prepare a financial report for a company listed on the London Stock Exchange. The report must take into account the viewpoints of all corporate stakeholders.
Following is the data on ratio analysis of Goodwin PLC
GOODWIN PLCApr-22 Apr-21 Apr-20GBP GBP GBP
Profitability ratios
| ∟ Earning Per Share (Units) (Net Profit / Number of Shares) | 169.14 | 167.82 | 107.93 | |
| ∟ Return on Capital Employed (%) (Operating Profit / Capital Employed) × 100% Capital Employed = (Net Debt + Equity Shareholder’s Fund) | 12.6 | 13.1 | 10.4 | |
| ∟ Gross margin (%) (Gross Profit / Turnover) × 100% | 29.6 | 29.7 | 24.1 |
Operational ratios
| ∟ Dividend Coverage Ratio (x) Profit After Tax / Dividend Payable | 1.6 | 1.7 | 1.4 | |
| ∟ Interest Coverage Ratio (x) Profit before Interest & Tax / Net Interest Payable | 15.7 | 26.8 | 16 | |
| ∟ Stock Turnover (x) ((Stock × (365/Cost of Sales)) | 145 | 137 | 149 | |
| ∟ Debtor Collection (days) Trade Debtors × (365 / Turnover) | 57 | 54 | 60 |
Structure ratios
| ∟ Current ratio (x) Current Assets / Current Liabilities | 1.93 | 2.11 | 1.43 | |
| ∟ Liquidity ratio (x) (Current Assets Less Inventories) / Current Liabilities | 1.11 | 1.35 | 0.72 | |
| ∟ Gearing (%) (Net Borrowing / Shareholder’s Fund) × 100% | 25.8 | 15.4 | 17.9 |
REQUIRED
The report should be structured with section headings, etc, and should be addressed to your supervisor (use your seminar tutor’s name). The report should contain the following:
(a) Introduction
∙ The introduction should summarise the aims and objectives of your report
∙ together with any limitations in this type of financial analysis.
∙ It should also give a brief profile of the company,
∙ its markets and products and
∙ a brief commentary on its key operations and recent trading background.
(b) Ratio Analysis
∙ Interpretation of accounting ratios as provided together with any other relevant data to evaluate the relative performance and financial status of the companies.
∙ The trend analysis should be made from the viewpoints of the company’s’ key stakeholders (management, investors and lenders).
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∙ You may use ratios published within the annual reports plus ratios calculated yourself (the workings for which should be shown in an appendix).
∙ The comparison must be year on year for each company.
∙ Appropriate use of graphs and table to perform the analysis
(c) Performance factors
∙ Research and discuss any financial factors that may have affected the company’s’ performance during the periods under review, with reasons.
∙ Research and discuss any non-financial factors that may have affected the company’s’ performance during the periods under review, with reasons.
∙ This must take into account the performance of the different segments of the businesses as shown in the annual reports as well as all other relevant factors.
∙ These factors must be specific to your chosen companies.
Note: This information can be obtained from various commentaries within the annual reports, corporate websites, trade journals and financial press websites. You must show the source of the information that you use in this section.
(d) Overall Report Presentation (including report structure, grammar and spelling)
(e) Appropriate intext citations and bibliography
Marking Criteria of the task
● Word limit 1000 words (excluding any information supplied in appendices).
How to get better result:
∙ Evidence that you can apply your knowledge of financial analytical tools to a specific company. ∙ Demonstration of your understanding of the implications of the environment in which the company operates and its ability to perform well.
∙ Evidence of your capability to search for and use source material. A reading list should be given. All sources used should be specifically cited as mentioned. Good use of citations enhances the credibility of your findings, as they demonstrate that you have carried out an adequate search for information and can substantiate your views.
Access to financial statements of companies
You need to visit the website of the respective companies and access their annual report to access their financial statements. Please take support from the module tutor to search those online. It is not necessary to print off the entire financial report. You can extract the main financial statements and only those sections which are relevant to your report.
P.T.O.
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Question 4: Learning Reflection – 10 marks
This task requires reflection to provide insights into the process and quality of personal learning. Your reflection should focus on your actions, motivations and emotions and should analyse what changes will be made to practice in light of experiences, feedback and reflection. A good reflection will help you understand what, why and how you learn.
Note You should not comment on the theories of reflection. You should also not evaluate teaching or the module for this exercise.
Section D: Assessment Submission
The student must work individually to develop the answers to the given assignment. There is no tolerance for COLLUSION.
The student should submit one final file for each task in a pdf format to RTE on the given deadline. The word limit of the final report is a 1,500-word limit excluding appendices and bibliography. Submissions of excessive length, or which attempt to subvert length criteria with the misuse of appendices, will be penalized.
Standard University regulations regarding plagiarism will apply and be rigorously enforced. THIS INCLUDES THE USE OF PUBLISHED SECONDARY RESEARCH (E.G. MINTEL, ETC.) WITHOUT ACKNOWLEDGEMENT AND/OR INTERPRETATION. The course tutor will also apply penalties to submissions which in his/her sole opinion show evidence of collusion.
Section E: Marking Criteria: How you will be evaluated?
Task 1:
Accuracy of the number calculated
Use of Prescribed Format to develop the financial statement
Evidence of clear workings shown
Use of relevant concepts learned in the model and use of references
Quality of interpretation of financial performance
Task 2:
(a) Introduction
● Summary of the aims and objectives of your report
● limitations in this type of financial analysis
● a brief profile of the company and its markets and products
● a brief commentary on its key operations and recent trading background
(b) Ratio Analysis
● Definition, formula, expectation, business performance, calculated numbers) ● Presentation of calculated numbers in the given table
● Trend analysis (Table and graphs)
(c) Performance factors
● Discussion of Financial Factors affecting business performance
● Discussion of Non-Financial Factors affecting business performance
● Conclusion & Summary of overall business performance
(d) Overall Report Presentation (including report structure, grammar and spelling)
(e) intext citations and bibliography
(f) Learning Reflection
Section F: Recommended Table of Contents
| Task 1 | Task 2 |
| Cover Page | Cover Page |
| Table of Contents | Table of Contents |
| Q.1. (with working note) | Q.3. |
| Q.2. (with working note) | Q.4 |
| Bibliography | Bibliography |
| Appendices | |
| Learning Reflection |
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Section G: Recommended Readings for References
Reference Text textbook
∙ Scott, P (2018), Introduction to Financial Accounting OUP.
∙ Scott, P (2018), Introduction to Accounting OUP.
∙ Carey M., Knowles C. and Towers-Clark J. (2016) Accounting a smart approach Oxford University Press www.oxfordtextbooks.co.uk/orc/carey/
∙ Annual reports of Selected Company
Section H: Assessment Grade Description
GSBL UNDERGRADUATE GENERAL GRADE DESCRIPTORS
| Level 3 or 4 | Level 5 | Level 6 | |
| General | Acquisition of broad knowledge Evaluate information Use the information to plan, develop and problem solve | Generate ideas through analysing concepts Demonstrate command of specialised skills Formulate responses to well defined and abstract Analyse and evaluate information | Critically review, consolidate and extend a body of knowledge using specialised skills Critically evaluate concepts and evidence from a range of sources Transfer and apply skills and exercise significant judgement in a range of situations |
| 70-100 (A) | Very good Demonstration of a very good comprehension of the task with evidence of analysis, synthesis, evaluation and critical appraisal Use of a wide variety of appropriate sources Transformation of knowledge Independent thinking and development of ideas Ability to communicate very clearly and effectively Very good evidence of preparation Very good organisation, structure and presentation of work – minimal errors Good references, appropriate sources (quality and quantity). No errors in reference list or citations. | Excellent Advanced scholarship Goes beyond the material provided Excellent link to research Excellent analysis, synthesis, evaluation and critical appraisal Excellent evidence of preparation Comprehensive and critical understanding of the topic Excellent ability to communicate clearly and effectively Excellent organisation, structure and presentation of work Good references, appropriate sources (quality and quantity). No errors in reference list or citations. | Excellent – Outstanding (for use at far end of range) Outstanding understanding, exploration and insight Strong evidence of originality and development of own ideas Develop a highly complex argument Outstanding ability to communicate topics clearly and concisely Advanced organisation, structure and presentation of work Good references, appropriate sources (quality and quantity). No errors in reference list or citations. References well utilised and critiqued |
| 60-69 (B) | Very good Demonstration of very good comprehension of the task with evidence of analysis, synthesis, evaluation Use of a wide variety of appropriate sources Transformation of knowledge Independent thinking and development of ideas Ability to communication clearly and effectively Very good evidence of preparation | Very good Demonstration of very good comprehension of the task with evidence of analysis, synthesis, evaluation Use of a wide variety of appropriate sources Transformation of knowledge Independent thinking and development of ideas Ability to communication clearly and effectively Very good evidence of preparation | Very Good Advanced scholarship Goes beyond the material provided Very good link to research Very good analysis, synthesis, evaluation and critical appraisal Very good evidence of preparation Comprehensive and critical understanding of the topic |
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| Very good organisation, structure and presentation of work – minimal errors Good references, appropriate sources (quality and quantity). Minimal or no errors in reference list or citations. | Very good organisation, structure and presentation of work – minimal errors Good references, appropriate sources (quality and quantity). Minimal or no errors in reference list or citations. | Very good ability to communicate clearly and effectively Very good organisation, structure and presentation of work Good references, appropriate sources (quality and quantity). No errors in reference list or citations. | |
| 50-59 © | Adequate – Satisfactory Some analysis but limited Some insight and exploration of ideas Sound conclusions No significant inaccuracies or omissions Some analysis, evaluation or synthesis of information Lacking clarity at times Some evidence of preparation Referencing is sound. Mostly appropriate sources. Numerous errors or inconsistencies | Adequate – Satisfactory Some evidence of thinking independently to develop own ideas Evaluation of relevant theories or literature Reasonable ability to communicate clearly and effectively Report information in a structured way Use of an appropriate format Quite comprehensive knowledge Satisfactory evidence of preparation Satisfactory referencing, appropriate sources. Numerous but minor errors in references | Adequate- Satisfactory Evidence of thinking independently to develop own ideas Evaluation of relevant theories or literature Ability to communicate clearly and effectively Report information in a structured way Use of an appropriate format Reasonably Accurate, quite comprehensive knowledge Satisfactory evidence of preparation Coherent and well presented – minor errors Satisfactory referencing, appropriate sources. Minor errors in references |
| 40-49 (D) | All learning outcomes metCompetent (practical) May be incomplete in knowledge (some errors or omissions) Insufficient analysis, evaluation or synthesis Limited application of theories/knowledge An awareness of appropriate principles/theories/technique s Irrelevance to the task at times Disorganised work with weak standard of presentation Numerous aberrations from the requirements of the task Referencing is attempted although may be inconsistent, many errors, weak sources | All learning outcomes metCompetent (practical) May be incomplete in knowledge (some errors or omissions) Weak or no analysis, evaluation or synthesis Some application of theories/knowledge An awareness of appropriate principles/theories/technique s Irrelevance to the task at times Disorganised work with weak standard of presentation Aberrations from the requirements of the task Referencing is attempted although may be inconsistent, many errors, weak sources | All learning outcomes metCompetent (practical) May be incomplete in knowledge (some errors or omissions) Weak or no analysis, evaluation or synthesis Some application of theories/knowledge An awareness of appropriate principles/theories/technique s Irrelevance to the task at times Disorganised work with weak standard of presentation Aberrations from the requirements of the task Referencing is attempted although may be inconsistent, many errors, weak sources |
| Condone d Pass 30-39 (R2/F1) | Learning outcomes not met Little relevant knowledge Lacking structure Numerous errors in structure and form Limited understanding of concepts/theories No appropriate analysis, evaluation or synthesis Significant inaccuracies/omissions | Learning outcomes not met Little relevant knowledge Lacking structure Numerous errors in structure and form Limited understanding of concepts/theories No appropriate analysis, evaluation or synthesis Significant inaccuracies/omissions | Learning outcomes not met Little relevant knowledge Lacking structure Numerous errors in structure and form Limited understanding of concepts/theories No appropriate analysis, evaluation or synthesis Significant inaccuracies/omissions |
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| Not competent Little or no attempt to use references and if so very weak with errors | Not competent Little or no attempt to use references and if so very weak with errors | Not competent Little or no attempt to use references and if so very weak with errors | |
| Under 30 (R2/F2) | Little engagement with the task No basic understanding of the subject matter Poor communication (written or verbal) Lacking or no structure Significant errors in structure and form Many significant inaccuracies/omissions – very little correct Little or no attempt to use references and if so, very weak with many significant errors | Little engagement with the task No basic understanding of the subject matter Poor communication (written or verbal) Lacking or no structure Significant errors in structure and form Many significant inaccuracies/omissions – very little correct Little or no attempt to use references and if so, very weak with many significant errors | Little engagement with the task No basic understanding of the subject matter Poor communication (written or verbal) Lacking or no structure Significant errors in structure and form Many significant inaccuracies/omissions – very little correct Little or no attempt to use references and if so, very weak with many significant errors |
| (0%) | No submission Nothing of relevance in the work submitted | No submission Nothing of relevance in the work submitted | No submission Nothing of relevance in the work submitted |
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