BSB00173 4RFinAccounting

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					Staffordshire University
Business School
Hand in location: (tick as             STOKE                    STAFFORD
appropriate)


Assignment Details
Course:                 Financial Accounting (level4)
Module :                Title Financial Accounting
Module Code:            BSB00173-4

Assignment Title:       Course Assignment in Financial Accounting
Weighting:              30%
Tutors:                 J O’Neill, T Clewlow
Word Guideline:         1000 words on the essay question only



Assignment Timetable:
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
AND CAPITAL


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
Assessment Brief:


Assessment Criteria



Academic Misconduct
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:
http://www.staffs.ac.uk/assets/academic_misconduct_tcm44-26770.pdf

You should hand in one copy of your assignment by the time and date above to the
appropriate ‘hand-in location’ at the Business School Receptions on either the second floor
Brindley Building, B227 or K166, Octagon, Beaconside as specified above. The Brindley
reception is open Monday to Thursday 9.00am to 6.00pm and Friday 9.00am to 4.30pm. The
Octagon reception is open Monday to Thursday 8:45am to 4:30pm and Friday until 4:00pm.
Fill in the Business School front cover (staple together with your assignment). This must be
date stamped. MAKE SURE that you fill in all the relevant details on this form (these are
given above!). One copy of the front sheet, date stamped, will be returned to you by the
Office. This is your receipt, keep it. You can submit work by post, but you must send it
recorded delivery, it must be postmarked two days before the deadline date and a copy
must be kept by you in case it is lost in the post. Faxed assignments will not be accepted.

If you fail to submit any assessment for a module you will be given a Grade Point N (Fail due
to non-submission) for that module and you will no longer have a guaranteed re-sit
entitlement. Any further attempt entitlement will be at the discretion of the Award Board.

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,
otherwise a 0 will be awarded.

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
postgraduate

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

Question 1

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


Notes

    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

Required:

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)
Question 2

Trial balance for Paul Squire Bruce as at 31st March 2012:

                                                    £           £

Capital                                                      150,000

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

Drawings                                         66,000

Sales                                                        420,650

Purchases                                       182,000

Bank (o/draft)                                                11,295

Creditors                                                     17,240

Salaries and wages                               22,000

Insurance (01Oct2012 – 30Sept2013)                4,000

Advertising                                       6,440

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

                                                718,760      718,760
The following information has also been provided:

1)     Inventory at 31st March 2012 was valued at £2,500.

2)     Depreciation
       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
       2013 (prepayment).

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.




Required:

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.



                                                                                         (35 marks)
Question 3

There are six Fundamental Accounting Concepts and principles upon which Financial Statements are
prepared.

Discuss the merits of each concept in turn, giving examples to support and illustrate your answer.

                                                                                          (24 marks)

If you were to identify two concepts as ‘key’ which two would they be, support your answer with
evidence of research.

                                                                                          (6 marks)

To what extent are the concepts and principles contradictory?

                                                                                          (15 marks)

                                                                                     (total 45 marks)

All research must be correctly referenced and source included in a bibliography



                                                                          (total Marks awarded 100)

				
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