Reference no: EM132824270
Unit 6 Financial Accounting - BTEC level 3 Extended diploma Business
The aim of this unit is to enable learners to understand the importance of and reasons for recording transactions and statements accurately year on year, and of complying with all relevant legislation regulations and accounting frameworks
Assignment - Adjustments to Final Accounts and Cash Flow
Task 1:
You are presented with the following trail balance in respect of Jobb Plc as at 30 June 2019:
Questions
a) Complete the Income statement, Statement of Financial Position and Statement of Changes in Equity as at 30th June 2019.
b) Using the accounts completed above in question a, update a new set of accounts using the adjustments below:
(Submit the original accounts and the updated accounts separately)
i. Depreciation of 2% on cost is to be provided on Buildings.
Depreciation of 40% on the reducing balance basis needs to be provided on Equipment.
iii. Expenses incurred but not paid in the year amounted to £4.000 for electricity. £2.000 for telephones.
iv. Advertising cost of £2000 paid in advance.
ix The estimate for Corporation Tax for the year is £310,000.
c) Assess the impact of these adjustments in part b to the Income statement and Statement of Financial position items for Jobble plc.
(Discuss the required changes and their implications and make the adjustments on the spreadsheet itself, saving and printing the amended financial statements).
Task 2:
The Statements of Financial Position of West Ltd tiff the past two years are set out below:
Requirement:
1. Prepare Cash Flow Statement for West Ltd for the year ended 31st October 2019 in accordance with the relevant standard IAS7.
2. Explain the reasons why a cash flow statement is important to West ltd. 500 words
(Prepare a written explanation of the role of the cash flow statement in linking profit made with changes in assets and liabilities. Show a summary of the cash flows into and out of an organisation, during the accounting period. The relationship between profit and cash should be defined clearly.
3. Discuss the importance of the different elements of West ltd cash flow statement.
(Consider the importance and contents of operating cash flows, investing cash flows and financial cash flows. Also emphasise the cash flow statement's role in an organisation's liquidity, given the link between liquidity and survival. 600 words
4. Comment on the strengths and weaknesses for West ltd financial position using a cash flow statement
(Highlight negative cash flows for any element, comment on the appropriate use of cash funds and whether an organisation is generating sufficient reserves of cash to allow for future spending or expansion etc).
Attachment:- Financial Accounting.rar