Financial Statements and Analysis Assignment

Main Users of Financial Statements

In the main body of your submission you must give credit to authors on whose research your work is based. Append to your submission a reference list that indicates the books, articles, etc. that you have read or quoted in order to complete this assignment (e.g. for books: surname of author and initials, year of publication, title of book, edition, publisher: place of publication).

• Discuss who might be the main users of financial statements and their needs

• Tackle a scenario that requires preparing the main

• Understand the basic principles underlying financial financial statements. statements

• Tackle a scenario that requires analysing the main

• Recognise the measurement problems arising in financial statements. financial accounting

• Critically discuss the needs of the main users of

• Appreciate the significance of the choices of financial statements. accounting policies

• Critically discuss the accounting regulations.

• Interpret simple financial statements

• Use a set of financial statements to value an organisation for investment purposes

Instructions to Candidates:

Given that you may need to make use of equations as part of your answers, we recommend completing these specific elements on paper, taking good quality photographs of these and pasting them in to your submission to create a single document for submission.

During the assessment, students are not allowed to show, share by any other means, or discuss the questions or their work and answers to/with anyone. Students may not consult with any other person regarding their assessment, check their answers with any person or discuss any of the materials or concepts relating to the module and the assessment with any person.

All answers will be processed through Turnitin and scrutinised for plagiarism- including peer plagiarism. Answer papers must include a cover page with the following statement:

The following information is relevant:

1. Corporation tax for the year is estimated at £68,000.

2. Salesmen are owed commission of £3,000 in respect of December sales. It will be paid on 31st January 2019 and has not been recorded in the ledger accounts yet

3. Goods valued at £980 were sent to customers on 31st December 2018. Payment is due on 28 February 2019. This has not been recorded in the ledger accounts yet.

4. The preference shares should be included within equity.

Required:

a) Prepare an income statement for the year ended 31st December 2019 for Eccles plc and a statement of financial position as at that date. [40 marks]

b) Explain why the statement of financial position balances.

Chocco plc is a long-established chocolate and confectionery manufacturer. All products are manufactured in the UK, but sales are made worldwide. It is a growing but competitive market. Given below are extracts from their financial statements,

Your work must demonstrate the growing extent of your knowledge and understanding of concepts and underlying principles associated with the subject area. Knowledge relates to the facts, information and skills you may have acquired through your learning. You must demonstrate your understanding by interpreting the meaning of facts and information (knowledge). This means that you need to select and include in your work the concepts, techniques, models, theories, etc appropriate to the task set. You should be able to explain the theories, concepts, etc meaningfully to show your understanding. Your mark/grade will also depend upon the extent to which you demonstrate your knowledge and understanding; ideally each should be complete and detailed, with comprehensive coverage. Specific to this assignment: You should be able to demonstrate your knowledge and understanding of the differentiation between different transaction types and how they are processed by a business.

Analysis

Your work must contain evidence of logical, analytical thinking, evaluation and synthesis. For example, to examine and break information down into parts, make inferences, compile, compare and contrast information. This means not just describing What? but also justifying: Why? How? When? Who? Where? At all times, youmust provide justification for your arguments and judgements. Evidence that you have reflected upon the ideas of others within the subject area is crucial to you providing a reasoned and informed debate within your work. Furthermore, you should provide evidence that you are able to make sound judgements and convincing arguments using data and concepts. Sound, valid conclusions are necessary and must be derived from the content of your work. There should be no new information presented within your conclusion. Where relevant, alternative solutions and recommendations may be proposed. Specific to this assignment: This assignment is weighted more towards your knowledge and understanding of the accounting principles involved and also to their practical application and deployment. However, you should be able to demonstrate evidence of logical thought in the processing of financial information and also the ability to think analytically in the processing of more advanced or unusual transaction types.