劉必成財(cái)務(wù)報(bào)表課業(yè)2完成版

1、NANJING UNIVERSITY OF ARONAUTICSAND ASTRONAUTICS CENTREBTEC HND IN BUSINESSASSIGNMENT COVER SHEETNAME OF STUDENT劉必成 LIU Bi ChengREGISTRATION NO. 19083120UNIT TITLEFinancial ReportingASSIGNMENT TITLEASSIGNMENT NO2 of 2NAME OF ASSESSORCHENG KeSUBMISSION DEADLINE 10 October, 2010I, 劉必成 LIU Bi Cheng her

2、eby confirm that this assignment is my own work and not copied or plagiarized from any source. I have referenced the sources from which information is obtained by me for this assignment._SignatureDateFOR OFFICIAL USEAssignment Received By: Date: Unit OutcomesOutcomeEvidence for the criteriaFeedbackA

3、ssessors decisionInternal VerificationPresent financial information in accepted formats for publication3explain how the information needs of different user groups vary3.1prepare financial statements in a form suitable for publication by a sole trader, partnership and limited company3.2Interpret fina

4、ncial statements4calculate accounting ratios to assess the performance and position of a business4.1prepare a report incorporating and interpreting accounting ratios, including suitable comparisons4.2Assessment CriteriaPass is achieved by meeting all the requirements defined in the assessment criter

5、ia.MeritIdentify and apply strategies to find appropriate solutions. (M1)An effective approach to study and research used to investigate economic, social and global environment affect selected organisation as well as organisation responsibilities against its stakeholders.Select and apply appropriate

6、 techniques.(M2)Students reviewed the relevant theories that are applied to the practical case. Various sources of information used related to set tasks.Present and communicate appropriate findings(M3)An appropriate structure and approach have been used to prepare a report. Present data using a rang

7、e of methods e.g. tables, diagrammatical and graphical forms.DistinctionUse critical reflection to evaluate own work and justify valid conclusions (D1)Creation has been used to generate and justify valid comments based on investigation selected organisation, economic, social and global environment.T

8、ake responsibility for managing and organizing activities(D2)Demonstrates substantial investigations have planned, managed and organized for selected organisation related to objectives and responsibilities of an organisation as well as its environment. Demonstrate convergent, lateral and creative th

9、inking (D3)An innovative and creative thought has been used to identify mission, objectives and responsibilities of selected organisation as well as investigate related economic, social and global environment affects selected organisation. Merit grades awardedM1M2M3Distinction grades awardedD1D2D3Co

10、mments by Assessor Overall, youve got: Areas for improvement:ASSESSOR SIGNATURENAME: _DATE: _STUDENT SIGNATURENAME: _DATE: _FOR INTERNAL USE ONLY VERIFIED: YES NO VERIFIED BY: DATE: The following trial balance relates to CHK at 31 March 2010:Equity shares of$1 each 60,0005%loan note(note(i)20,000Ret

11、ained earnings at 1 April 200938,400Leasehold(15 years)property at cost(note(ii)45,000Plant and equipment at cost(note(ii)67,500Accumulated depreciation1 April 2009leasehold propertyplant and equipment6,00023,500Investments at fair value through profit or loss(note(iii)26,500Inventory at 31 March 20

12、1048,000Trade receivables40,700Bank 4,500Deferred tax(note(v) )6,000Trade payables52,000Revenue(note(iv)400,000Cost of sales294,000Construction contract(note(vi)20,000Distribution costs26,400Administrative expenses(note(i)34,200Dividend paid 10,000Loan note interest paid(six months)500Bank interest

13、200Investment income 1,200Current tax(note(v)1,400613,000 613,000The following notes are relevant:(i)The 5%loan note was issued on 1 April 2009 at its nominal (face) value of$20 million. The direct costs of the issue were $500,000 and these have been charged to administrative expenses. The loan note

14、 will be redeemed on 31 March 2012 at a substantial premium. The effective finance cost of the loan note is 10%per annum.(ii)Non-current assets:In order to fund a new project, on 1 October 2009 the company decided to sell its leasehold property. From that date it commenced a short-term rental of an

15、equivalent property. The leasehold property is being marketed by a property agent at a price of$40 million, which was considered a reasonably achievable price at that date. The expected costs to sell have been agreed at$500,000.Recent market transactions suggest that actual selling prices achieved f

16、or this type of property in the current market conditions are 15%less than the value at which they are marketed. At 31 March 2010 the property had not been sold.Plant and equipment is depreciated at 15%per annum using the reducing balance method.No depreciation/amortization has yet been charged on a

17、ny non-current asset for the year ended 31 March 2010. Depreciation, amortization and impairment charges are all charged to cost of sales.(iii)The investments at fair value through profit or loss had a fair value of$28 million on 31 March 2010.There were no purchases or disposals of any of these inv

18、estments during the year.(iv)It has been discovered that goods with a cost of$6 million, which had been correctly included in the count of the inventory at 31 March 2010,had been invoiced in April 2010 to customers at a gross profit of 25% on sales, but included in the revenue(and receivables)of the

19、 year ended 31 March 2010.(v)A provision for income tax for the year ended 31 March 2010 of$12 million is required. The balance on current tax represents the under/over provision of the tax liability for the year ended 31 March 2009.At 31 March 2010 the tax base of CHKs net assets was$14 million les

20、s than their carrying amounts. The income tax rate of CHK is 30%.(vi)The details of the construction contract are:costs to 31 March 2010 further costs to completematerials 5,0008,000labor and other direct costs3,000 7,0008,00015,000plant acquired at cost12,000per trial balance 20,000The contract com

21、menced on 1 October 2009 and is scheduled to take 18 months to complete. The agreed contract price is fixed at$40 million. Specialized plant was purchased at the start of the contract for$12 million. It is expected to have a residual value of $3 million at the end of the contract and should be depre

22、ciated using the straight-line method on a monthly basis. An independent surveyor has assessed that the contract is 30% complete at 31 March 2010.The customer has not been invoiced for any progress payments. The outcome of the contract is deemed to be reasonably certain as at the year end.Task 1(a)

23、Prepare the income statement for CHK for the year ended 31 March 2010.CHKIncome statement for the year ended 31 March 2010$000Revenue404,000Cost of sales (315,700)Gross profit 88,300Distribution costs (26,400)Administrative expenses(33,700)Investment income 1,200Profit(gain)on investments at fair va

24、lue through profit or loss1,500Finance costs (2,150)Profit before tax 28,750Income tax expense (8,800)Profit for the year 19,950Working Paper of CHKIncome statement (unit: $000)Accounting TerminologyComputational ProcessRevenueRevenue=400,0008,000+12,000=404,000Administrative expensesAdministrative

25、expenses=34,200500 loan note issue costs=33,700Profit(gain)on investments at fair value through profit or lossProfit(gain)on investments at fair value through profit or loss=28,00026,500=1,500Finance costsFinance costs=200+1,950=2,150Income tax expense Income tax expense=12,0001,4001,800=8,800 (b)Pr

26、epare the statement of financial position for CHK as at 31 March 2010.CHKStatement of financial position as at 31 March 2010$000$000AssetsNon-current assets:Property, plant and equipment 46,400Investments at fair value through profit or loss 28,000 74,400Current assets：Inventory 48,000Construction c

27、ontractamounts due from customer 13,400Trade receivables 32,700 94,100Non-current assets held for sale 33,500Total assets 202,000Equity and liabilitiesEquity：Equity shares of$1 each 60,000Retained earnings 48,350108,350Non-current liabilities：Deferred tax 4,2005%loan notes(2012)20,450 24,650Current

28、liabilities：Trade payables 52,000Bank overdraft 4,500Accrued loan note interest 500Current tax payable 12,000 69,000Total equity and liabilities 202,000Working Paper of CHKStatement of financial position(unit: $000)Accounting TerminologyComputational ProcessAssetsTotal non-current assetsTotal non-cu

29、rrent assets=property,plant and equipment + Investments at fair value through profit or loss= 46,400+ 28,000=74,400Trade receivablesTrade receivables=40,7008,000= 32,700 Total current assetsTotal current assets= Inventory+Construction contractamounts due from customer+Trade receivables=48,000+13,400

30、+ 32,700=94,100Total assetsTotal assets=Total non-current assets+Total current assets+Non-current assets held for sale=74,400+94,100+ 33,500=202,000Equity and liabilitiesRetained earningsRetained earnings=38,400+19,95010,000 dividend paid=48,350Total equityTotal equity=Equity shares of$1 each+Retain

31、ed earnings=60,000+ 48,350= 108,350Total non-current liabilities Total non-current liabilities=Deferred tax+5%loan notes(2012)=4,200+20,450=24,650Total current liabilitiesTotal current liabilities=Trade payables+Bank overdraft+ Accrued loan note interest+Current tax payable=52,000+4,500+500+12,000=6

32、9,000Total equity and liabilitiesTotal liabilities= Total equity+ Total non-current liabilities+Total current liabilities=108,350+24,650+69,000=202,000 Notes to the financial statements are not required. A statement of changes in equity is not required either.Task 2Comment on the different theories

33、of consolidated financial statements. Some instances are necessary for your analysis.2. Consolidated Financial StatementsConsolidated financial statements are financial statements that factor the holding company's subsidiaries into its aggregated accounting figure. It is a representation of how

34、the holding company is doing as a group. The consolidated accounts should provide a true and fair view of the financial and operating conditions of the group. Doing so typically requires a complex set of eliminating and consolidating entries to work back from individual financial statements to a gro

35、up financial statement that is an accurate representation of operations.Consolidated financial statements are produced by the parent company when the financial statements of a parent and a subsidiary or subsidiaries are added together so that they portray the resulting financial statements as if the

36、y were the financial statements of a single company, i.e., a single business entity. A subsidiary is a separate legal entity whose outstanding common stock is more than 50 percent owned by another company. Consolidated financial statements are prepared primarily for the benefit of the shareholders a

37、nd creditors of the parent company. Banks and analysts often consider consolidated statements more meaningful than the separate statements of members of the affiliation. Nevertheless, subsidiary creditors, minority shareholders, and regulatory agencies must rely on the statements of the subsidiary t

38、o assess their claims. The usual condition for consolidating the statements of an affiliated group of companies is ownership, directly or indirectly, of more than 50 percent of the outstanding voting shares of another company. Generally accepted accounting principles (GAAP) in the United States requ

39、ire that all subsidiaries be consolidated unless control is lacking or is likely to be temporary. Accounting for consolidations requires :(1) the summation of the parent and subsidiary accounts when preparing the parent's consolidated statements and (2) the elimination of intercompany transactio

40、ns, i.e., transactions between parent and subsidiary companies. When a parent company owns less than 100 percent of the subsidiary's stock, the part owned by outside investors is referred to as minority interest. 2.1.The Keys to Reading Consolidated Financial Statements - A Brief IntroductionIn

41、recent years, numerous Taiwanese companies have responded to competitive pressures by internationalizing and diversifying their businesses. Whether to better position themselves in their main markets or improve their production arrangements, many have established overseas (and domestic) investment h

42、olding companies, branch companies and manufacturing centers. These investee companies are formally independent legal entities, but in terms of operations and risk assessment, they are really part of a larger enterprise. Given how difficult it is to get the "big picture" from unconsolidate

43、d, stand-alone financial statements, consolidated financial statements are gradually becoming the main financial statements such group enterprises issue.When individual financial statements are adopted, a controlling company's financial statement need not show the total assets, liabilities, reve

44、nue and expenses of its subsidiaries, so the important thing about consolidated financial statements is that they allow you to see the subsidiaries' assets, liabilities and income/loss. Preparation of consolidated financial statements involves abstruse accounting theory and principles making it

45、difficult for users without an accounting background to understand their contents. General readers of financial statements may be able to use the following key points to extract useful information:2.1.1.Sales revenue / gross profit Since sales and purchases between parent companies and subsidiaries

46、are written off in consolidated financial statements, what you see are external sales by the consolidated entity. Therefore, financial statement users can compare sales revenue and gross profit from sales in the consolidated statements against those in the unconsolidated statements. With a little an

47、alysis, it is possible to assess the prospects for earnings distributions and understand the corporate group's true total costs, total expenses, or profit conditions in the company's industry.2.1.2.Accounts receivable and notes receivable When consolidated financial statements are prepared,

48、receivables with subsidiaries are first written off, and then subsidiaries' receivables are incorporated into the consolidated statement. Readers can easily analyze the corporate group's accounts/notes receivable turnover and make sense of its allowance for uncollectible accounts and its acc

49、ount factoring situation.2.1.3.Inventory / fixed assets Readers of consolidated statements can use the information on subsidiaries' inventories and fixed assets to see if the inventory and fixed assets of the entire group are reasonable given the nature of the group's industry, and if stocks

50、 are consistent with actual business operations. One may also assess the group's overall inventory turnover rate and losses from market price declines and obsolete and slow-moving inventories.2.1.4.Goodwill When a parent company acquires another company's shares, the amount paid often exceed

51、s the net value of the company's equity, and the difference between what the acquirer pays and the net fair value of the acquired company's assets is what is referred to as goodwill. Financial statement readers can use the consolidated statement to find out the acquired subsidiary's good

52、will, subsequent loss of goodwill and related information.2.1.5.Group-wide debt service capacityUnder some circumstances, a parent company will provide guarantees to financial institutions so that its subsidiary can obtain financing for the operating capital it needs. Financial statement readers mus

53、t pay close attention to subsidiaries' offshore financing risk. Because the consolidated statements brings together subsidiary borrowing information, they make it easy for users to analyze a company's debt ratio and actual debt service capacity.2.1.6.Cash flowWhen financial statements are co

54、nsolidated, one should look carefully at major cash inflows from operations and cash outflows for capital expenditures, as well as annual aggregate financing and repayment circumstances.2.1.7.Notes to the financial statements l List of subsidiaries in the entity for which the financial statements ar

55、e compiled, including additions and subtractions or other changes in the list:Disclosures in this note can help readers of the statements understand subsidiaries' scale and scope of business operations, which is useful when judging the reasonableness of a company's transactions and its expos

56、ure to investment risks. l Commitments and contingencies:Disclosures in this note can help readers discover possible contingent losses hidden among subsidiaries. l Parent-subsidiary transactions written off ("related party transactions"):This note discloses all transactions between the parent company and its subsidiaries. Such transactions must be separately recorded in accordance with relevant accounting principles. l Multinational operations risk exposure:From regional fina