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Draft the consolidated statement of financial position for Seven Stars Plc and its subsidiary undertaking as at 31 March 2021
Assessment Brief
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Module Title: Financial Reporting
Module Code: 502AF-209AF
Assessment Type:
Coursework
Assessment Number:
CW1
Study Mode:
Full-time
Weighting:
10 credits
Submission Date:
Submission Time:
18:00
Campus:
CUC-CUL
Task:
INSTRUCTIONS TO STUDENTS
PLEASE READ CAREFULLY
This is an individual piece of assignment and research work.
You are required to complete the following three tasks in order to fulfil the requirements for learning outcomes (LO1/LO2/L04) Financial Reporting module.
ALL the questions are COMPULSORY.
Candidates should allocate their time carefully.
Tasks 1 and 2 will also require you to carry out the necessary research work and provide the relevant references using the APA 7th edition style of referencing to support your answer.
Task 1
Seven Stars PLC is a Leicester based exporter of Petroleum products. As part of its strategy to expand its business by acquiring other entities, the company acquired 75% of the issued share capital of Hanover Ltd on 1 April 2020 for £1,960,000. At that date Hanover Ltd had issued share capital of £1,400,000 and retained earnings of £784,000.
Extracts from the statements of financial position for the two companies, one year later at 31 March 2021, are as follows:
Seven Stars Plc
Hanover Ltd
£000
£000
Assets
Investment in Hanover Ltd
1,960
Non-current assets
3,696
1,858
Current assets
2,415
1,197
Total assets
8,071
3,055
Equity and liabilities
Equity
Share capital
2,800
1,400
Retained earnings
1,246
829
Total equity
4,046
2,229
Non-current liabilities
1,162
448
Current liabilities
2,863
378
Total liabilities
4,025
826
Total equity and liabilities
8,071
3.055
Additional data
Included within the current assets of Seven Stars Plc and in the current liabilities of Hanover Ltd, is an inter-company transaction for £70,000 that took place in early March 2021.
Seven Stars Plc has decided non-controlling interest will be valued at their proportionate share of net assets.
It is the policy of the directors to impair goodwill at 10% this year.
Required
Using the template below
Draft the consolidated statement of financial position for Seven Stars Plc and its subsidiary undertaking as at 31 March 2021. (15 marks)
You work for Seven Stars Plc as an Assistant to the Chief Financial Accountant. The international financial reporting standard (IFRS 10, Consolidated Financial Statements) gives guidance on the accounting treatment for consolidated financial statements. Analyse the key points from the standard for the board of directors of your Company.
You must carry out the necessary research work and provide the relevant references using the APA 7th edition style of referencing to support your answer.
Word count is 500. (15 marks) (Total 30 marks)
Seven Stars Plc – Consolidated statement of financial position as at 31 March 2021
£000
£000
Assets
Goodwill
Non-current assets
Current assets
Total assets
Equity and liabilities
Equity
Share capital
Retained earnings
Non-controlling interest
Total equity
Non-current liabilities
Current liabilities
Total liabilities
Total equity and liabilities
Workings to support task 1
Task 2
As the Principal Assistant Accountant, part of your role is to prepare the statement of cash flows and statement of changes in equity for Sunrise Ltd for the year ended 31 March 2021.
The statement of comprehensive income and statement of financial position and their comparative year of Sunrise Ltd are set out below.
Sunrise Ltd – Statement of comprehensive income for the year ended 31 March 2021
Continuing operations
£000
Revenue
3,849
Cost of sales
(1,837)
Gross profit
2,012
Dividends received
35
Gain on disposal of property, plant and equipment
74
Distribution costs
(874)
Administrative expenses
(486)
Profit from operations
761
Finance costs
(76)
Profit before tax
685
Tax
(161)
Profit for the period from continuing operations
524
Sunrise Ltd Statement of Financial Position as at 31 March 2021
2021
2020
£000
£000
ASSETS
Non-current assets
Property, plant and equipment
5,096
3,486
Current assets
Inventories
203
193
Trade and other receivables
259
274
Cash and cash equivalents
186
0
648
467
Total assets
5,744
3,953
EQUITY AND LIABILITIES
Equity
Share capital
2,100
1,400
Share premium
1,050
700
Retained earnings
815
605
Total equity
3,965
2,705
Non-current liabilities
Bank loans
1,400
840
1,400
840
Current liabilities
Trade payables
218
202
Tax liabilities
161
150
Bank overdraft
0
56
379
408
Total liabilities
1,779
1,248
Total equity and liabilities
5,744
3,953
Further information
The total depreciation charge for the year was £511,000.
Property, plant and equipment costing £364,000 with accumulated depreciation of £133,000 were sold in the year.
All sales and purchases were on credit. Other expenses were paid for in cash.
A dividend of £315,000 was paid during the year.
Required
Prepare a reconciliation of profit from operations to net cash from operating activities for Sunrise Ltd for the year ended 31 March 2021. (20 marks)
The international accounting standard (IAS 7, Statement of Cash Flows) gives guidance on the accounting treatment for statement of cash flows. As the Assistant Accountant of your Company, you are required to analyse the key points from the standard for the board of your Company.
You mst carry out the necessary research work and provide the relevant references using the APA 7th edition style of referencing to support your answer.
Word count is 500. (15 marks) (Total 35 marks)
Task 2: Answer
Task3:
Roselyn Johnson owns a medium sized Soft Furnishing shop and trades as Furnisher Distributors in Sussex for many years. During the year ended 31 December 2020, the business purchased and sold a variety of house hold Furnishing items for sale to small Retailers.
The book-keeper for the business was not able to prepare the ledgers for the year 2020, and as a consequence of this, you are asked to do it.
It is now April 2021, and you have been asked by Roselyn Johnson to post the
following transactions to his ledgers:
25-Jan She sold goods to Kim-Kim Ltd for £73,395 on credit.
26-Apr She bought goods from Sim Silas Ltd for £ 57,225 on credit.
13-Jun She bought goods from Valerie Ltd for £57,509 on credit.
9-Aug She purchased Motor Van for the business by cheque for £8,560.
29-Sep She sold goods to Dorcas Delvin Ltd for £77,000 on credit.
15-Oct Paid Sim Silas Ltd £50,295 for goods; and paid Valerie Ltd for
goods, £50,887.
23-Nov Received a cheque from Kim-Kim Ltd for £65,695; and from
Dorcas DelvinLtd for £61,106
09-Dec Paid for carriage outwards, £6,513 by cheque.
16-Dec Goods were returned to Valerie Ltd for £5,080.
19-Dec Paid wages and salaries for the year, £20,018.
Required
Write up the ledgers to record the transactions and then balance off the ledgers. 35 marks
Completion of this assessment will address the following learning outcomes:
1.
Demonstrate competence in double entry accounting techniques, financial calculations and maintain accounting records.
2.
Identify and correct omissions and errors in accounting records and financial statements.
4.
Specify the components of financial statements (including consolidation of financial statements and statement of cash flow), and prepare and present non-complex accounts for sole traders, partnerships and limited companies.
Guidance Notes and Considerations
Referencing
Access, Foundation, Year 1 and Year 2:
You should use APA 7th edition style of referencing.
Referencing guidance can be accessed on the Library’s LibGuides pages .
Use of Sources and Information:
You can access high quality, authoritative information via the library. Use LibGuides to access Locate, BibliU and research guidance.
Academic Writing Resources
There are a variety of academic writing resources available which can be accessed viaLibGuides . These writing guides can help with different types of assessment as well as important writing skills needed for university.
Glossary of Assessment Terms for Assessment Writing – this is an a-z that covers the majority of terms used in assessment briefs, learning outcomes and feedback throughout the CU Group. If you would like any further support with your assessment, you can contact your Academic Writing Developer or visit the Academic WritingLibGuides page.
If you would like to book an Academic Writing appointment for support with your assessment, you can contact your Writing Developers:
CUC: learningservices.cuc@coventry.ac.uk
CUS: academicskills.cus@coventry.ac.uk
CUL Dagenham: academicwritingservice@cul.coventry.ac.uk
CUL Greenwich: awsgreenwich.cul@coventry.ac.uk
Academic Integrity Guidance
The best way to avoid academic misconduct is to follow appropriate academic and referencing conventions. Further guidance on academic integrity and conduct can be found using LibGuides.
Collusion between students (where sections of your work are similar to the work submitted by other students in this or previous module cohorts) is taken extremely seriously and will be reported to the Academic Conduct Panel. This applies to all coursework and exam answers. If you would like more guidance on understanding collusion, you can find it on LibGuides.
If an assessment suspected of involving a breach of academic integrity is found to display a marked difference in writing style, knowledge and skill level from that demonstrated elsewhere on the course, you may be required to undertake a Viva Voce in order to prove the coursework assessment is entirely your own work.
Proofreading of assessments by CU approved proofreaders is permitted. There is a list of approved proof readers along with guidelines for use. However, please remember that proofreading is a lengthy and detailed process for which there is a cost. If you decide to use a proofreader, please take this into account and contact them at least 10 days in advance of your assessment deadline.
You must not submit work for an assessment that you have already submitted (partially or in full), either for your current course or for another qualification of this university, unless this is specifically provided for in your assessment brief or specific course or module information.
It is important to realise that as a student you should not submit all or part of an assessment for which you have already received academic credit, to be used for an assessment in a different module. Reusing your own work in this way is called self-plagiarism. Where you wish to refer to some of your own work you must reference it in the same way that you reference work by other people.
Submission Guidelines
Late Submission
There should be a title page which clearly identifies the following:
* Name and code of the module
* Title of the Assessment
* Assessment number
* Word count
The word count identified includes quotations and citations. However, it does exclude the list of references and/or the bibliography and, unless specifically stated, encompasses a discrepancy of + or – 10%.
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