Fundamentals of Accounting and Finance July 23, 2018 – Posted in: Order Custom Essay Paper

Fundamentals of Accounting and Finance

Referral Assignment Brief

    Module Title:   Fundamentals of Accounting and Finance   Module   FB454 (W)
        Code:  
                 
    Assignment   Referral EX1   Assessment   60%  
    No/Title:     Weighting:    
               
    Submission       Feedback   N/A
    Date:     Target Date:  
    Module Co-       Degree/      
          Foundation   Degree
    ordinator/   Cecilia Diaz (E)/ Paul Brewster (W)    
        Please   Level 4
    Tutor:        
          specify      
                 
    Submission Instructions:          
                   
  1. Complete an Assignment Submission Form ensuring that you enter your correct ID number.
  1. You are required to submit your work electronically via Turnitin by 4pm on the submission date Monday 6th August 2018. Do not submit assignments to lecturing staff.
  1. You are reminded that it is your responsibility to retain both an electronic and a hard copy of your assignment for future reference. You may be required to produce a copy of your assignment.
  1. You are reminded of the UCFB regulations on cheating and plagiarism. In submitting your assignment, you are acknowledging that you have read and understood these regulations.
  1. Late submissions are not accepted for this assignment.

Instructions to Students/Checklist:

  • This is an individual assignment.
  • All written work must be word-processed and should state at the end of the report, the total number of words used.
  • You may include appendices and must provide a reference list using the Harvard system at the end of the report.
  • The report has a word count of 1,500 words (+ or – 10%, 150 words).

This assignment  tests the following Learning Outcomes for the module:

LO1: Demonstrate knowledge of the role of accounting within the organisation with respect to both reporting and decision-making aspects.

LO2: Explain the structure of and terms used within the main financial statements.

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LO5: Demonstrate an understanding the theory and application of accounts management, the principles of spreadsheet balance and financial decision making within the sports industry.

The Assignment Task:

Task: Written Report (1500 words)

Your report should cover the following Questions:

  1. Question 1 (Compulsory) 
  1. Chose two questions from Questions 2 – 4. Section A: Question 1 (40 Marks Total) 
  • Describe the following accounting terms and where possible provide examples to support your description. (10 marks)
  1. Intangible Asset
  1. Absorption Cost
  1. Relevant Cost
  1. Going Concern
  1. Top – Down Budget
  • Explain how  financial  information  (Management  and  Financial  Accounting

Information) could be used by the following stakeholders of a football club. (5 marks)

  1. The Owner/s
  1. Business managers at the Club
  1. The Fans of the club
  1. The Government
  1. Suppliers of finance – Bank

(c)Budget preparation may take many forms, with the two main methods being Incremental Budgets and Zero Based Budgets. Explain both methods and their relevance to football clubs within a league. (5 Marks)

(d) Pantino Ltd are a sports manufacturer and retailer, who historically have produced sports equipment for the following sports – Tennis and Hockey. They are considering entering the football market by producing protective Head Gear to be worn by kids as a form of protection against possible concussion and degenerative head diseases like Chronic Traumatic Encephalopathy (CTE). Pantino Ltd have spent £20,000 conducting both Primary and Secondary research with respect to head injuries associated with kids

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playing football and believe the time is right to enter this potential market. Currently there are no manufacturers producing this form of sports equipment for kids, which currently presents Pantino Ltd with an opportunity to be first in the market. Various departments including the accounts team have provided the following expected costs and revenues associated with the Head Gear.

Projections:

  • Budgeted selling price per unit £85
  • Budgeted Variable Costs (Materials and labour) per unit £35
  • Budgeted Fixed Production Costs £80,000 (First Quarter)
  • Expected demand 15,000 units (First Quarter)

Using Cost, Volume – Profit (CVP) analysis produce the following information required by the Board of Directors.

  1. Calculate the number of units the company would have to sell in order to Break Even. (2 marks)
  1. Assuming the company hopes to make a target profit of £500,000 (First quarter) how many units will have to be sold. (2 Marks)
  1. Calculate the number of units that would need to be sold in order to Break Even if the company were to sell each unit for £65 – Projected costs remain the same. (2 marks)
  1. Produce a budgeted profit statement (For the quarter) using Marginal Costing and Absorption Costing Principles, using the above projections. Assume 17,000 produced, with 15,000 units sold in quarter (12 marks)
  1. Explain the difference in the profit figures calculated in (d). (2 marks)

Part B: Part B (Chose two questions from question 2-4)

Question 2: (30 MARKS TOTAL)

  1. The following is financial data taken from financial statements of two football clubs.
  Football Club – Football Club –
Financial Data A B
  £000 £000
Revenue 94,449 104,437
Gross Profit 10,226 33,011
Operating Profit 3,613 27,985
Current Assets 20,744 36,988
Current Liabilities 84,924 62,973
Wages 57,900 49,082
Average Attendance 17,010 Fans 31,693 Fans
Capacity at stadium 21,577 Fans 32,312 Fans
Long – Term Liabilities 18,012 2,484

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Shareholders’ Funds -5,282 47,443

Calculate the following ratios for both clubs. (12 marks)

  • Gross Profit Percentage
  • Operating Profit Percentage
  • Wages to Revenue ratio
  • Current Ratio
  • Gearing Ratio
  • Stadium utilization percentage

Note: show all of your workings and round all your answers to two decimal points.

  1. Interpret and comment on each of the calculated ratios for both clubs. (12 marks)
  1. Discuss the usefulness and limitations of using ratios as financial analysis tool. (6 marks)

Question 3:

The following Trial Balance has been prepared for the sports retailer – Bishops (Unincorporated Business). Prepare the following financial statements and explain their significance to users:

  • Statement of Profit or loss (15 Marks)
  • Statement of Financial Position (15 Marks)

Bishops – Trial Balance as at 30 May 2017

  Debit Credit
Description: (£) (£)
Sales   300,080
Opening Inventory – 1 June    
2016 10,000  
Purchases 85,000  
Wages 60,350  
Electricity 1,450  
Insurance 1050  
Sundry Expenses 350  
Motor Expenses 3,120  
Premises 150,000  
Computer Equipment 3,000  
Motor vehicle 14,000  
Trade Receivables 6,000  
Cash at Bank 205,000  
Capital   267,740
Drawings 32,000  
Trade Payables   3,500
  571,320 571,320

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Inventory as at 30 May 2017, valued at £5,000

Question 4: (30 Marks Total)

  • Explain the purpose of depreciating Tangible Fixed Assets/Non – Current assets and its impact on the Financial Statements. (10 marks)
  • Explain the differences between the Straight Line Method and Reducing Balance Method of depreciation. (5 marks)
  • The following information has been provided for the lighting Rigs used by Southside City FC when maintaining the football pitch. Show the statement of Financial Position extracts for 2016 and 2017 using the Straight Line Method and Reducing Balance Method. (15 marks)
  • Cost of Lighting rigs – £48,000 bought on the 1 January 2016
  • The estimated useful economic life is 15 years
  • The estimated residual value is £3,500
  • The rate of reducing balance method depreciation is 30%

Additional guidance:

  • Report Format should be used – Headings and Sub – Headings
  • Calculations should be placed with the appendices – CVP Analysis, Ratio Calculations, Financial Statements and Depreciation calculations.
  • Assessment Criteria
Relevance: The correct following of instructions and guidance, assignment 15%
brief clearly addressed with a focus on the central themes of the task.
 
   
Knowledge: Knowledge should be demonstrated in the following areas   
accounting terminology, financial information and users, Budget preparation, 25%
CVP   analysis,   Ratio   Analysis,   Financial   statement   preparation   and
 
Depreciation.  .  
   

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Analysis:  Applied  knowledge  of  management  accounting  and  financial  
accounting techniques when focusing on CVP Analysis, Budget preparation  
approaches,  Financial  information  and  stakeholders,  Ratio  analysis,  The 20%
purpose of financial statements and depreciation techniques. Analysis provided  
through industry examples that link theory to practice.  
   
Independent Research: Evidence of reading from a breadth of academic and  
industry sources, correct in-text citations and a final reference list that clearly 20%
applies the Harvard style.  
   
Presentation: Presented in correct report structure/format with a competent 20%
application of grammar and spelling.
 
   

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