Recent Papers 05-10-2022

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

  1. Draft the consolidated statement of financial position for Seven Stars Plc and its subsidiary undertaking as at 31 March 2021. (15 marks)
  1. 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

  1. 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)
  2. 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 WritingLibGuidespage.

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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