Assignment Brief – BTEC (RQF)
HNC in Business & HND in BUSINESS (Business Management)
Transferable skills and competencies developed
Managing financial data
Written communicatioon using a range of media
Manipulating and interpreting data using spreadsheets
Effective communicatiion of relevant information across the organisation and to appropriate stakeholders
Creation and interprettation of information and showing how that information can be used most effectively to add value to the orgganisation
Ability to use quantitaative skills to manipulate data, evaluate, estimate and model business probleems
Application of accountting knowledge to consistently deliver highh-quality, accurate data and infoormation in a timely fashion.
Vocational scenario
Having successfully completed your six-month probation as a Graduate Traiinee at the accountancy firm, you have now been attached to a unit in the firm that deaals with the provision of accountancy and consultancy services to small businesses that are typically set up as sole traders, not-for-profit or partnerships. The firm is careful about which small and emerging businesses it works with as it seeks to spot growth potential and identify and work with clients that have scalable business models.
Assignment activity and guiddance
You are initially working with a selection of three of these small businesses that have been trading for three years and whiich now need annual trading statements to be compiled and submitted in line with governmment requirements. You have been given:
• an extended trial balance for each business, including accruals, prepaymennts and figures for bad debts and depreciation
• a range of comparative key peerformance ratios from the previous year.
1. Allaband Typing Services- a small not for profit organisation
2. Rich Allaband- sole trader selling perfumes
3. Allaband and Bhara- a small partnership business trading in second-hand books. These local businesses do not make use of contemporary software to suppoort its bookkeeping and accounting fuunction. This is something which concerns you as you feel that it represents an opportuniity for the business to save time and resourcee.
Your supervisor has provided the following Trial Balances and additional information for
Empire College London
Assignment Brief – BTEC (RQF)
HNC in Business & HND in BUSINESS (Business Management)
each of the three businesses/cllients:
Allaband Typing Services (not for profit). Trial balance at 31 December 2021
£ Debit £ Credit
Computer and furniture 7500
Subscriptions 25000
Donations 30000
Staff costs 15000
Administrative fees 12500
Rent of premises 3000
Stationery and postage 2250
Cash at Bank 14500
Cash in Hand 250
55000 55000
There was no cash in hand or in the bank on 31 December 2020. Rent of £1000 remained unpaid for the year 2021 on 31 December 2021.
Rich Allaband (Sole trader)- Trial balance at 31 December 2021
£ Debit £ Credit
Cash in Hand 2000
Cash at Bank 54000
Trade receivables 12000
Trade payables 7000
Capital account 70000
Drawings 5000
Sales 61000
Purchases 30000
Opening stock 14000
Carriage and marketing 4000
Employee salary 8000
Insurances paid 2000
Office rent 2000
Furniture and fittings 5000
138000 138000
Please note that 10% of trade receivables at 31.12 2021 should be written off as bad debts,
Empire College London
Assignment Brief – BTEC (RQF)
HNC in Business & HND in BUSINESS (Business Management)
£1000 should be accrued for innsurances, furniture should be depreciated at the rate of 10% using thestraight-line method and Closing Stock at 31 December 2021 totalled £20,000.
Allaband and Bhara (Partnership). Trial balance at 31 December 2021
£ Debit £ Credit
Capital account – Allaband 30000
Capital account- Bhara 30000
Current account- Allaband 4000
Current account- Bhara 4000
Office equipment 10000
Opening stock 18000
Drawings- Bhara 2000
Administrative costs 4000
Trade receivables 10000
Sales revenue 46000
Purchases 20000
Trade payables 4000
Rent paid 6000
Insurances 3500
Delivery costs 6000
Cash at bank and in Hand 38500
118000 118000
Please note that office equipment bought in 2021 should be depreciated at the rate of 20% per year using the reducinng balance method. Prepaid rent at 31 Decem ber 2021 amounted to £3000 and Closing inventory at 31 December 2021 totalled £21000.
The files for each client include some ratios calculated for previous years as follows:
Allaband Typing Services 2020 Surplus for the year: Revenue NIL, Staff costs:Total income= 30%
Rich Allaband: 2020 Gross Proofit Ratio=55%.
2020 Current Raatio=1:1
2020 Efficiency Ratio (Days’ credit taken) =60 days Allaband and Bhara: 2020 Currrent Ratio=50%
2020 Efficiiency Ratio (Days’ debtors in sales) = 80 days
Your supervisor, one of the firmm’s Key Account Managers, has asked you to compile the year-end financial statements ready for submission and provide, for each client, some
Empire College London
Assignment Brief – BTEC (RQF)
HNC in Business & HND in BUSINESS (Business Management)
detailed analysis of the figures produced, which will be presented in the for m of an accompanying letter.
Specifically, you will undertake the following:
1. From the data provided, you are required to prepare the year-end finnancial statements, taking into consideration accounting principles, conventiions and standards. You will needd to make and show appropriate adjustmentss to both the income statement and thebalance sheet.
2. Write an accompanying letter to the client that will be sent with the completed financial statements.
The letter needs to include:
• calculation of relevant profitably, liquidity, asset usage and investment ratios
• critical evaluation of the perfoormance to the business year on year (makingg reference to data you have calculated, and data provided from the previous year), with reeference to relevant benchmarks as well ass any limitations of using financial ratios as peerformance measures
• an outline of the benefits of contemporary accounting software packages, with examples of products on the market
• justified conclusions and recoommendations for your client.
Recommended Resources
Please note that the resources listed are examples for you to use as a starting point
– the list is not definitive. Weblinks
The balance careers. Business lettter format with examples. Available at: https://www.thebalancecareers.coom/how-to-format-a-business-letter-2062540 Xerox. Writing an effective business letter. Available at: https://www.xerox.com/en-us/small-business/tips/business-letter
HN Global
HN Global (2021) Reading Lists. Available at:
https://hnglobal.highernationalls.com/learningzone/reading-lists
HN Global (2021) Student Resoource Library. Available at:
https://hnglobal.highernationalls.com/subjects/resource-libraries
HN Global (2021) Textbooks. Available at:
https://hnglobal.highernationalls.com/textbooks
Empire College London
Assignment Brief – BTEC (RQF)
HNC in Business & HND in BUSINESS (Business Management)
Learning Outcomes and Asssessment Criteria
Pass Merit Distinction
LO2Prepare basic financial sttatements for unincorporated and small business organisations in accordance with accounting principles, conventions and standards.
P3Prepare financial statementss M2Produce financial
from a given trial balance for sole statements from a given trial
traders, partnerships and not-for- balance, making appropriate
profit organisations, to meet adjustments.
accounting principles, conventiions
and standards.
LO3 Interpret financial statements.
LO2 and LO3
D2 Critically evaluate finanncial statements to assesss organisational perfoormance using a rangee of measures and benchmarks to make justified conclusions.
P4Calculate and present financcial ratios from a set of final accounnts.
P5 Compare the performance of an organisation over time using financial ratios.
M3Evaluate the performance
of an organisation over time,
using financial ratios with
reference to relevant
benchmarks.
Student Declaration
I certify that the contents of my assignment will be entirely my own work and understand fully the consequences of plagiarism.
Signature: …………………………………. Date: …………………………..
Resubmission Signature: …………………………… Date: ………………………..
Plagiarism
Plagiarism is a particular form of cheating. Plagiarism must be avoided at all costs and students who break the rules, however innocently, will be penalised. You must keep a careful record of all sources you use, including all internet material. It is your responsibility to ensure that you understand correct referencinng practices. These are referred to in the Handbook. Please consult the relevant unit lecturer or your course tutor if you need any furtheer advice.
