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(PDF) Introduction To Accounting And Finance Assignment

   

Added on  2021-02-19

17 Pages4414 Words290 Views
UGB 163 – INTRODUCTIONTO ACCOUNTING ANDFINANCE ASSESSMENT

Table of ContentsINTRODUCTION...........................................................................................................................1PART-A: YARNSHAW LIMITED................................................................................................1a. Profit and Loss Statement .......................................................................................................1b. Statement of Balance Sheet.....................................................................................................3PART-B: RECKTURK PLC...........................................................................................................5a. Determining contribution per wardrobe made towards covering fixed costs when sellingprice is £40 .................................................................................................................................5b. Calculating Break-even Point and Margin of Safety when selling price is £40.....................6c. Ascertaining Company Profit when Unit Production is 54,000 wardrobes at £40 per unit....7d. Assessing strategy for Reckturk Plc........................................................................................7e. Identification of Underpinning Asssumptions in Break-even Model.....................................8PART-C: ROSEVILLE PLC...........................................................................................................9a. Recommendation of acceptance or rejection of Capital Budgeting Projects using InvestmentAppraisal techniques...................................................................................................................9b. Report on key merits and limitations of various investment appraising techniques.............10c. Report on identification of key merits and demerits of using Budgets as a strategy planningtool.............................................................................................................................................12CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................15

INTRODUCTIONThe concepts of Accounting and Finance are highly interrelated yet different fields.Accounting is mostly concerned with the acknowledgement of transactions that can be measuredin monetary terms. While discipline of Finance relates to the presentation in the form of reportsto the stakeholders of the business. These two elements ensure that financial transactions arerecorded and communicated to the stakeholders of the company in an efficient manner(Ainsworth and Deines, 2019). They enable the procurement of financial resources as well astheir allocation in a justifiable manner on the part of management who are responsible for takinginformed decisions regarding the same.This report aims to provide a detailed account on the fundamental models, concepts andtechniques used with financial and management accounting. For this purpose, it overlooks at theconcept of preparation of financial statements such as Income Statements, Balance Sheet,determination of contribution, break-even point, Margin of Safety in terms of units and revenue.Additionally, various investment appraising tools utilised in capital budgeting related decisionsalong with benefits and limitations of budget as a strategic planning tool have been analysed.PART-A: YARNSHAW LIMITEDa. Profit and Loss StatementFor a business to ascertain whether or not it is able to grow or move in the directionwhich is in alignment of its vision and mission, an organisation tends to ascertain the net profitearned during a specific time-period. For this purpose, Income Statement is prepared which helpsin communication of Earnings of the business after taking into account tax, interest, depreciationand other expenses (Alamad, 2019). Thus, providing an overview of corporate profitability forthe management as well as stakeholders of a particular organisation such as Yarnshaw. This hasbeen showcased as under:Statement of Income for the year ended December 31, 2018Particulars£Particulars£To Opening Stock-By Revenue3759600To Purchases1630000By Closing Stock4273600To Wages2143010To Gross Profit (Balancing figure)2601901

Total1033200Total1033200To Electricity Bill Payments59270By Gross Profit b/d260190To Van Running Expenses40320To Irrecoverable Debts1800To Rent paid to owner6108000To Rates76930To Depreciation on Van11000To Net Profit for the year82870Total260190Total260190Working Notes:1. Purchases:Particulars£Credit Purchases583200Cash Purchases incurred 46800Total Purchases made during the year6300002.Wages:Particulars£Total Wages paid during the year140400Add: Wages owed for the last week of the year2610Total Wage Expenses1430103. Revenue for the year ended December 31, 2018:Particulars£Credit Sales604800Cash Sales154800Total Sales made during the year7596004. Determining Closing Stock Value:Particulars£Stock available as on 01.01.2018-Add: Total Purchases made during the year1630000Less: Cost of Goods Sold (=£291,600+£64,800)(356400)2

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