Hand in location: (tick as STOKE STAFFORD
Course: Financial Accounting (level4)
Module : Title Financial Accounting
Module Code: BSB00173-4
Assignment Title: Course Assignment in Financial Accounting
Tutors: J O’Neill, T Clewlow
Word Guideline: 1000 words on the essay question only
Date Set: 30th June 2012
Submission Date: 13th August 2012 4pm
Expected Return: 19th September 2012
Learning Outcomes to be Assessed:
1. UNDERSTAND THE LANGUAGE AND CONTEXT OF FINANCIAL Knowledge &
ACCOUNTING, FUNDAMENTAL CONCEPTS AND PRINCIPLES Understanding
2. APPLY THE DOUBLE ENTRY SYSTEM FOR ASSETS, LIABILITIES Application
3. PROCESS COMMON TRANSACTIONS AND ADJUSTMENTS USING Application
THE DOUBLE ENTRY SYSTEM AND PRODUCE A SET OF ACCOUNTS
FOR A SOLE TRADER
Assignment set by: J. O’Neill and T. Clewlow
Assignment verified by: Alison Maguire
The Business School takes any cases of academic misconduct, including plagiarism very
seriously. The penalties are severe and can in some cases result in a student not being
allowed to continue their studies. The policy on Academic misconduct can be found at:
You should hand in one copy of your assignment by the time and date above to the
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Brindley Building, B227 or K166, Octagon, Beaconside as specified above. The Brindley
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Assignments must be submitted by the due date. The only circumstance in which
assignments can be submitted late is if an extenuating circumstances form is submitted. In
these circumstances work may be submitted up to 10 working days late only (this is not
automatic). If the extenuating circumstances are upheld, the assignment will be graded,
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Maximum Word Length:
State the number of words used on the assignment front sheet. You may include diagrams,
figures etc. without word penalty. A sliding scale of penalties for excess length will be
imposed according to the amount by which the limit has been exceeded.
1-10% excess no penalty
11-20% excess 10% reduction in the mark
21-30% excess 20% reduction in the mark
31%+ excess the work will be capped at a pass GP 4 for undergraduate, GP 7 for
NB. None of the above penalties will be used to change your mark which is above the pass
mark, to one that is below the pass mark. Therefore the maximum penalty for exceeding the
word limit will be a reduction to a pass grade.
Answer all questions
The following balances have been extracted from the records of Jeremy Jones (sole trader) for the
year ended 31st December 2011:
£’000 (All figures are in pounds thousands)
Inventory 1st January 2011 2,800
Credit Purchases 28,200
Returns Outwards 2,200
Accounts Payable 3,250
Accounts Receivable 6,700
Credit Sales 52,000
Returns Inwards 720
Sundry Expenses 10,100
Carriage outwards 620
Fixed Assets at Cost 26,000
Provision for Depreciation at 01st January 2011 8,000
Closing Inventory 2,900
a) Fixed assets have an estimated residual value of £2,000 and an estimated useful economic
life of 6 years, depreciation should be calculated using the straight line method
b) In addition to the above a last minute credit sale of £2,500 has yet to be recorded
i) Prepare individual ledger accounts (‘T’ accounts) of the business including a separate Trading
Account and a Profit and Loss Account. These ledger accounts can then be used to support the
preparation of a formal Income Statement for the year ended 31st December 2011.
You are reminded to present clearly and accurately the narrative for each balance within the T
accounts (dates are not required).
ii) Present a formal Income Statement for the year ended 31 December 2011.
All workings must be shown
[Balance sheet ledger accounts / Balance Sheet is not required] (20 marks)
Trial balance for Paul Squire Bruce as at 31st March 2012:
Inventory at 1 April, 2011 2,300
Accounts Receivable 17,770
Property plant and equipment at cost 375,000
Motor vehicle at cost 30,000
Bank (o/draft) 11,295
Salaries and wages 22,000
Insurance (01Oct2012 – 30Sept2013) 4,000
Motor expenses 6,500
General expenses 2,300
Cash in hand 1,750
Long-term loan 80,000
Light and heat 2,700
Provision for depreciation: 31March2011
Property Plant and Equipment 31,250
Motor vehicles 8,325
The following information has also been provided:
1) Inventory at 31st March 2012 was valued at £2,500.
Within the Property Plant and equipment cost value of £375,000, £250,000 relates to land
which is not depreciated. The remainder is depreciated using the straight line method over
an estimated useful economic life of eight years with no residual value.
3) Motor Vehicles are to be depreciated using the reducing balance method at a rate of 15%
4) Insurance premium of £4,000 covers the period from 01 October 2012 to 30 September
5) A late invoice has been received relating to office stationary and photocopy paper which has
been used and is classified as general expenses to the value of £1,200.
6) It has been advised that the company should include a provision for doubtful debts within its
accounts to the value of 3% of its outstanding Accounts Receivables.
Prepare an Income Statement and Balance Sheet for Jeremy Jones for the year ending 31st March
2012, show all workings to support your financial statements.
There are six Fundamental Accounting Concepts and principles upon which Financial Statements are
Discuss the merits of each concept in turn, giving examples to support and illustrate your answer.
If you were to identify two concepts as ‘key’ which two would they be, support your answer with
evidence of research.
To what extent are the concepts and principles contradictory?
(total 45 marks)
All research must be correctly referenced and source included in a bibliography
(total Marks awarded 100)