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Financial accounting
QUESTION
Discuss financial accounting
| Subject | Business | Pages | 6 | Style | APA |
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Answer
MODULE 5 UNIT 2
Activity submission
Learning outcome:
LO5: Complete an income statement and statement of financial position based on information provided.
Name:
- Instructions and guidelines (Read carefully)
Instructions
- Insert your name and surname in the space provided above, as well as in the file name. Save the file as: First name Surname M5 U2 Activity Submission – e.g. Lilly Smith M5 U2 Activity Submission. NB: Please ensure that you use the name that appears in your student profile on the Online Campus.
- Write all your answers in this document. There is an instruction that says, “Start writing here” under each question. Please type your answer there.
- Submit your assignment in Microsoft Word only. No other file types will be accepted.
- Do not delete the plagiarism declaration or the assignment instructions and guidelines. They must remain in your assignment when you submit.
PLEASE NOTE: Plagiarism cases will be investigated in line with the Terms and Conditions for Students.
IMPORTANT NOTICE: Please ensure that you have checked your course calendar for the due date for this assignment.
Guidelines
- There are 6 pages and 2 questions in this assignment.
- Make sure that you have carefully read and fully understood the questions before answering them. Answer the questions fully but concisely and as directly as possible. Follow all specific instructions for individual questions (e. g. “list”, “in point form”).
- Answer all questions in your own words. Do not copy any text from the notes, readings or other sources. The assignment must be your own work only.
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Plagiarism declaration: |
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1. I know that plagiarism is wrong. Plagiarism is to use another’s work and pretend that it is one’s own or to fail to cite references when necessary. 2. This assignment is my own work. 3. I have not allowed, and will not allow, anyone to copy my work with the intention of passing it off as his or her own work. 4. I acknowledge that copying someone else’s assignment (or part of it) is wrong, and declare that my assignments are my own work. |
- Mark allocation
Each question receives a mark allocation. However, you will only receive a final percentage mark and will not be given individual marks for each question. The mark allocation is there to show you the weighting and length of each question.
Question 1 13
Question 2 12
TOTAL 25
Please note: Unlike most other assignments, this assignment will not be marked using a rubric, given the nature of the answers required.
- Questions
Use the trial balance provided below to answer both Question 1 and Question 2. Note that the accounts in the trial balance appear in no particular order.
Reminder:
You are not required to conduct independent research for this submission. However, if you wish to make use of additional sources outside of the course material, you will need to reference these sources correctly. Please consult the Course Handbook in the Orientation Module for guidance on referencing requirements.
In-text citations and reference lists are not included in the word count of your submission.
Next Generation Ltd
Trial balance on 31 December 2019
|
|
Debit |
Credit |
|
|
£ |
£ |
|
Share capital |
|
570,000 |
|
Property, plant, and equipment |
2,100,000 |
|
|
Bank |
195,000 |
|
|
Revenue |
|
480,000 |
|
Rental income |
|
35,000 |
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Cost of sales |
225,000 |
|
|
Salaries and wages |
110,000 |
|
|
Insurance |
28,000 |
|
|
Fuel |
12,000 |
|
|
Telephone line charges |
8,000 |
|
|
Interest income |
|
24,000 |
|
Interest expense |
71,000 |
|
|
Inventory |
165,000 |
|
|
Accounts receivable |
43,000 |
|
|
Accounts payable |
|
182,000 |
|
Tax expense |
17,000 |
|
|
Petty cash |
2,000 |
|
|
Long-term loan |
|
270,000 |
|
Short-term loan |
|
15,000 |
|
Mortgage |
|
1,400,000 |
|
TOTAL |
2,976,000 |
2,976,000 |
Question 1
Using the information included in the trial balance provided, complete the income statement for Next Generation Ltd for the year ending 31 December 2019. Add any further line items as necessary within the template by pressing the Enter key. Refer to the notes included in Unit 2 of this module to assist you with completing this question.
Start writing here, using the template below to complete this question:
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Next Generation Ltd Income statement for the year ended 31 December 2019 |
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|
|
£ |
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Revenue Cost of Sales |
480,000 225,000 |
|
Gross profit |
255,000
|
|
Other income |
|
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Rental Income Interest Income Net Gross Profit |
35,000 24,000 290,000 |
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Selling, administrative, and general expenses |
|
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Salaries and wages Insurance Fuel Telephone Charges Total Operating Expenses |
110,000 28,000 12,000 8,000 158,000 |
|
Operating profit |
132,000 |
|
Interest Expense Interest Income Net Interest Charge |
71,000 -24,000 47,000 |
|
Profit before tax |
85,000 |
|
Tax Expense |
17,000 |
|
Net profit |
68,000 |
Question 2
Using the information included in the trial balance provided, complete the statement of financial position for Next Generation Ltd as at 31 December 2019. Assume that the business is keeping the net profit earned during the year as retained earnings, instead of paying it out to the shareholders. Add any further line items as necessary within the template by pressing the Enter key. Refer to the notes included in Unit 2 of this module to assist you with completing this question.
Start writing here, using the template below to complete this question:
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Statement of financial position of Next Generation Ltd as at 31 December 2019 |
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|
|
£ |
|
Non-current assets |
|
|
Property Plant and Equipment |
2,100,000 |
|
|
|
|
Current assets |
|
|
Petty Cash Bank |
2,000 |
|
Bank |
195,000 |
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Inventory |
165,000 |
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Accounts Receivable |
43,000 |
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TOTAL ASSETS |
2,505,000 |
|
|
|
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Non-current liabilities |
|
|
Long-term Loan |
270,000 |
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Mortgage |
1,400,000 |
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Current liabilities |
|
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Short-term Loan |
15,000 |
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Accounts Payable |
182,000 |
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Owner’s equity |
|
|
|
|
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Share Capital |
570,000 |
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Retained Earnings |
68,000 |
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TOTAL EQUITY AND LIABILITIES |
2,505,000 |