Unit 4: Financial Performance, HR and Legislation for Bourne Leisure

This report provides a detailed analysis of Bourne Leisure Limited's financial performance, focusing on financial statements, ledger accounts, and trial balances. Part A investigates the principles of managing financial performance, including the preparation of financial statements, inventory records, and cash flow statements. Part B reviews the HR lifecycle stages, specifically focusing on the accounting job role, and outlines the importance of recruitment, onboarding, development, retention, and offboarding. The report also examines relevant legislation that hospitality organizations must adhere to, including potential implications of employee welfare and the interrelation of different roles within the hospitality sector. The report concludes with a summary of the key findings and their implications for Bourne Leisure Limited's overall success and financial health, including analysis of cost classification (direct and indirect costs), accurate transaction recording, and the role of financial management in achieving growth.

UNIT 4 - HOSPITALITY
BUSINESS TOOLKIT

Table of Contents
INTRODUCTION..........................................................................................................................3
PART A..........................................................................................................................................3
Investigate the principles of managing and monitoring financial performance.........................3
Ledger Accounts in the books of Bourne Leisure Limited.........................................................4
Trial balance of Bourne Leisure Limited as of 31 January 2020................................................6
PART B.........................................................................................................................................12
Reviewing the different stages of H.R. life cycle related to Bourne Leisure Limited..............12
Development of performance plan of Bourne Leisure Limited with the accounting job role..13
Specific legislation(s) that hospitality organisations have to comply and adhere to in the daily
transaction of business:.............................................................................................................15
Potential implications of employee’s welfare using legislatures..............................................16
Different roles in the hospitality sector and how they are interrelated.....................................17
CONCLUSION.............................................................................................................................18

INTRODUCTION
The current report will discuss the financial statements of the hospitality industry by
double-entry bookkeeping system along with ledger accounts and trial balance. The chosen firm
for this report is a U.K. based firm Bourne Leisure Limited. The report will be identifying the
types of sources document and recording processes and then investigate the principles of
managing financial performance. It will further represent the different stages of the H.R. life
cycle and its importance by making a PDP plan. It will further explain specific legislation that a
hospitality organisation has to comply with. Along with this, the report will be underlying the
importance of coordinating and integrating various functions of the department in Bourne
Leisure Limited.
PART A
Investigate the principles of managing and monitoring financial performance
Financial performance is the process of measuring firms overall financial health over a
given period. It also measures the policies of a firm’s and operations in monetary terms. It
includes the preparation of the income statement, which shows the profitability and financial
soundness of the business. There are many ways to control the financial performance of the
business, some areas underlying below:
 Preparation of Financial statements: Every company needs to prepare these
statements for calculation of financial performance at the year-end and financial
position as on the date of the firm. These statements give an overview of the
financial health of the organisations. Along with this, internal and external users
of the business will also use these statements for finding out the firm's
profitability and liquidity.
 Preparation Of Inventory Records: These records will help in finding out
overall purchases, work in progress and final products of stock used in
production. It also helps in the calculation of stock turnover ratios and
input/output ratios.
 Preparation of fund and cash flow statements: It implies the movement of
cash and cash equivalents in the business. It includes two aspects of cash inflow
& outflows of cash from different activities of the organisation. It Evaluates the

budgets of the past with present performance and analyse cash requirement for
the future.
Ledger Accounts in the books of Bourne Leisure Limited
Sample transactions in the books of Bourne Leisure Limited
Sr. No. Transactions
1 A proprietor J.K. begins a business entity called Bourne Leisure limited started
business on 1 January by Initial investment of cash £15000, Building £25000, bank
£30000
2 On 2 January, Purchase former restaurant building for £25000 on account of ram
furniture’s limited, paying £15000 in cash at the same time
3 On 5 January, Purchase Raw materials for production of Soft drinks, juice and food
£2000 and beverages for £2500 in cash
4 On 8 January Paid salaries to its staff of £1400
5 On 10 January paid cash to ram furniture’s
6 Sell food and beverages for £150000 On 12 January
7 Paid Electricity expenses on 15 January by £180 in cash
8 The deposit amount of £1700 into the bank on 17 January
9 Utility Expenses paid by the bank of £390 on account of 19 January
10 Let out three rooms on 21 January and charge from them from £4200 amount
received in cheque
11 His furniture purchased for £1200 on credit on 28 January from Hari limited.
Journal Entries in books of Bourne Leisure Limited
Date Particulars L/F Debit($) Credit($)
01/01/20 Cash A/c Dr
Building A/c Dr
Bank A/c Dr
15000
25000
30000

To Capital A/c
(Being capital Introduced in business)
70000
02/01/20 Building A/c Dr
To cash A/c
To Ram Furniture A/c
(Being Building purchased and paid 15000 in cash)
25000
15000
10000
05/01/20 Purchase (Food & Beverages) A/c Dr
To cash A/c
(Being food and beverages purchase as raw
material for cash)
4500
4500
08/01/20 Salaries A/c Dr
To Cash A/c
(Being Salaries paid in cash)
1400
1400
10/01/20 Ram Furniture A/c Dr
To cash a/c
(Being cash paid to Ram furniture )
10000
10000
12/01/20 Cash A/c Dr
To sales A/c
(Being Food and Beverages sell to its customers)
150000
150000
15/01/20 Electricity A/c Dr
To Cash A/c
(Being Electricity paid in cash)
180
180
17/01/20 Bank A/c Dr
To cash a/c
(being Cash deposit in bank)
1700
1700
19/01/20 Utility Expenses A/c Dr 390

To bank A/c
(Being utility expenses paid by bank)
390
21/01/20 Bank A/c Dr
To Sales A/c
(being rooms let out and revived amount by
cheque)
4200
4200
28/01/20 Furniture A/c Dr
To Hari a/c
(Being Furniture purchased on credit)
1200
1200
Trial balance of Bourne Leisure Limited as of 31 January 2020
Account name Debit($) Credit($)
Cash A/c 132220
Building A/c 50000
Bank a/c 35510
Capital a/c 70000
Ram furniture a/c 0
Purchase A/c 4500
Salary A/c 1400
sales A/c 154200
Electricity Expenses A/c 180
Utility Expense A/c 390
Furniture A/c 1200
Hari Limited A/c 1200

225400 225400
 The financial accounts are used to report the financial results of companies
operation. It assists the institution to get details of its performance which can be
utilized to compare from previous data. With help of deviation in position, reasons
can also be evaluated that helps organization to formulate effective strategies. The
equation cycle is considered to be foundation of double entry system. It represents
that business's sum of assets is equal to total of liabilities and shareholder's equity.
 The concept of double entry system is used in financial statement so that
standardize procedure can be setup. In addition to this, it allows obtaining accuracy
and errors can also be rectified. It is a common practice that conducted by all types
and scale of firm so that actual performance of company can be attained respect to
this, it assists management of company to take check its market share and
competitors position as well.
Analysis and evaluation of cost that managed to influence the financial performance
Classification of cost
Direct Cost: Those costs which are directly attributable to the products, or services or
department of the business. It includes direct material, direct labour, and direct overhead cost.
Indirect Cost: Those costs which are not directly attributable or identifiable to the goods or
services or the departments of the business. For example, rent and utilities, salaries, other office
expenses.
The quoted firm Bourne Leisure Limited has incurred both direct and indirect cost at the
same time, which includes material purchases, Direct labour cost. Examples of Fixed cost are

land and building taxes, wages to employees, hotel employees health premium etc. The variable
cost of the firm is food and beverages, housekeeping, guest room amenities, laundry expenses
etc.
The chosen firm can use a solar water heating system for reducing electricity cost or
implement cost-effective tools for reduction of indirect costs, be mindful about utility cost; by
negotiating rents, the firm can diminish rental expenses. By using these strategies, the company
can increase its profit.
Importance of accurate Recording of transactions in line with accepted accounting
principles
Generally Accepted Accounting Principles (GAAP) provides standards for recording
business transactions and allows investors to evaluate companies for effective decision makings.
It will help in reducing the risk of misrepresentation and fraud.
Role of financial management and monitoring in achieving growth in Bourne Leisure
Limited
The finance manager plays a very vital role in the day to day activities of the business.
The main goal of this manager is to maximise the value of the firm to its owners. Mainly three
major decisions will take by this manager Investing, financing and dividend policy decisions.
The chosen manager will also perform five major functions- planning, organising, staffing,
leading and controlling in the organisation.
APPENDIX
Cash A/c
Date Particulars J/f Amount Date Particulars J/f Amoun
t
01/01/20 To capital A/c 15000 02/01/20 By Building A/c 15000
12/01/20 To Sales A/c 150000 05/01/20 By purchase A/c 4500
08/01/20 By salaries A/c 1400
10/01/20 By ram furniture A/c 10000
15/01/20 By electricity A/c 180

17/01/20 By bank A/c 1700
30/01/20 By balance C/d 132220
165000 165000
01/02/20 To balance A/c 132220
Building A/c
Date Particulars J/f Amount Date Particulars J/f Amount
01/01/20 To capital A/c 25000 30/01/20 By Balance C/d 50000
02/01/20 To cash a/c 15000
02/01/20 To Ram Furniture
A/c
10000
50000 50000
01/02/20 To balance B/d 50000
Bank A/c
Date Particulars J/f Amount Date Particulars J/f Amount
01/01/20 To capital A/c 30000 19/01/20 By Utility Expenses
A/c
390
17/01/20 To cash A/c 1700 30/01/20 By balance C/d 35510
31/01/20 To sales A/c 4200
35900 35900
01/02/20 To balance B/d 35510
Capital A/c
Date Particulars J/f Amount Date Particulars J/f Amount
30/01/2 To balance C/d 70000 01/01/20 By cash A/c 15000

0
By Building A/c 25000
By Bank A/c 30000
70000 70000
01/02/20 By Balancer B/d 70000
Ram Furniture A/c
Date Particulars J/f Amount Date Particulars J/f Amount
10/01/20 To cash a/c 10000 02/01/20 By Building A/c 10000
10000 10000
Purchase A/c
Date Particulars J/f Amount Date Particulars J/f Amount
05/01/20 To cash A/c 4500 30/01/20 By Balance C/d 4500
4500 4500
01/02/20 To Balance B/d 4500
Salary A/c
Date Particulars J/f Amount Date Particulars J/f Amount
08/01/20 To cash a/c 1400 30/01/02 By Balance C/d 1400
1400 1400
01/02/20 To Balance B/d 1400

Sales A/c
Date Particulars J/f Amount Date Particulars J/f Amount
30/01/20 To Balance C/d 154200 12/01/20 By cash A/c 150000
31/01/20 By bank a/c 4200
154200 154200
01/02/20 To balance B/d 154200
Electricity Expenses A/c
Date Particulars J/f Amount Date Particulars J/f Amount
15/01/20 To cash A/c 180 30/01/20 By balance C/d 180
180 180
01/02/20 To Balance B/d 180
Utility Expenses A/c
Date Particulars J/f Amount Date Particulars J/f Amount
19/01/30 To bank a/c 390 30/01/20 By balance C/d 390
390 390
01/02/20 To balance B/d 390
Furniture A/c
Date Particulars J/f Amount Date Particulars J/f Amount
28/01/20 To Hari A/c 1200 30/01/20 By balance C/d 1200

1200 1200
01/02/20 To balance b/d 1200
Hari Limited A/c
Date Particulars J/f Amount($) Date Particulars J/f Amount($)
30/01/20 To balance C/d 1200 28/01/20 By furniture A/c 1200
1200 1200
01/02/20 By balance B/d 1200