Financial Accounting And Analysis Report Writing – Accounting Assignment Help

Assignment Task

Task

Question 1.

The following is a statement of financial position for Valencia and Co as at 31 January 2018.

During the year to 31 January 2019 the following transactions took place:

1. The owners withdrew equity in the form of cash of £18,000.

2. Offices were rented at an annual rental of £15,000. During the year, rent of £18,000 was paid to the landlord.

3. Sales revenue on credit totalled £182,100 (cost of £101,400).

4. Cash sales revenue totalled £5,200 (cost of (£2,900).

5. Receipts from credit customers (trade receivables) totalled £175,200.

6. Payments to credit suppliers (trade payables) totalled £114, 500.

7. Motor van running expenses paid totalled £10,800. The business uses straight line depreciation for non-current assets at a rate of 20% of cost per year.

8. Insurance on the premises was paid during the year for the period from 1 May 2018 to 30 April 2019 and amounted to £2,000. The insurance payable expense for the year to 31 January 2019 was £1,800.

9. Wages totalling £35,500 were paid during the year. At the end of the year, the business owed £2,200 of wages.

10.Inventories totalling £122,600 was bought on credit.

Required:

a) Prepare the income statement for the year ended 31 January 2019 for Valencia & Co.

b) Prepare the statement of financial position as at 31 January 2019 for Valencia & Co.

Question 2.

The following are summarised statements for E&M Ltd for 2019.

Required:

Part 1 E&M Ltd.

1. Calculate the operating cash cycle in days for E&M Ltd.

2. Discuss whether E&M Ltd has a liquidity problem. Explain your answer.

Part 2 Cobber Ltd.

Cobber Ltd is preparing financial statements for the period ending 31 July 2020 when the following items were discovered in the first week of August 2020. For each item, identify whether an adjustment to the financial statements is necessary or not.

Explain for your answer with reference to accounting concepts and standards as appropriate:

a) Depreciation has not been included in the accounts for 2020.

b) A fire which occurred in a warehouse owned by Cobber Ltd on 8 August. An immaterial amount of old stock was lost.

c) Wages for the casual staff for the last week of July has not been paid.

d) It was discovered that the rent paid during 2020 covered the period up to September 2020.

Question 3.

The following are summarised financial statements for Cordoba Ltd for two years.

Required:

Part 1 Calculate the following financial ratios for 2018 and 2019 for Cordoba Ltd:

1. Gross profit margin

2. Operating profit margin

3. Return on shareholder funds

4. Current ratio

5. Acid test ratio

6. Sales revenue to capital employed

Part 2.

Comment on the performance of Cordoba Ltd over the two years (2018 and 2019). Use the ratios calculated in Part 1, the additional information below and any other information in the financial statements which you think is appropriate. 

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