NATIONAL ECONOMICS UNIVERSITY

INTERNATIONAL SCHOOL OF MANAGEMENT AND ECONOMICS

BTEC HIGHER NATIONAL DIPLOMA IN BUSINESS (RQF)

ASSIGNMENT BRIEF

Unit Code, Number and Title Y/618/5038 RQF - Unit 5: Accounting Principles

Semester and Academic Year Semester 1 / Academic year 2021 - 2022

Le Quang Dung/ Nguyen Thi Phuong Hoa/
Unit Assessor(s)
Pham Thanh Huong/ Pham Thi Thuy
AP A2.1: Financial statements and budgeting
Component Number and Title
(Assessment 2 of 2, Individual assignment)
Issue Date Friday, October 22nd, 2021
Submission Date 10.00 am on Monday, December 13th, 2021

Student name

NEU Student ID Pearson ID

I certify that the evidence submitted for this assignment is my own. I

Learner declaration have clearly referenced any sources used in the work. I understand that
false declaration is a form of malpractice.

Student name / Signature Date: December 13th, 2021

Submission format

 This is an individual assignment.

 The submission format is in the form of an E-report. Please refer the Student handbook
(Vietnamese version, Appendix 2) for the Assignment submission rules.
 The file on Turnitin must be in Word format and include the first page of this cover sheet. The
first page of the cover sheet should be in the picture format in order to ensure the accepted
similarity of Turnitin.
 The similarity allowed is up to 25% after excluding references.
 Name of the file includes Student ID_Unit name_Assessment no. (E.g. “1010001_AP_A2.1”)
 Ensure that authenticity declaration has been signed electronically.
 Plagiarism is unacceptable. Students must cite all sources and input the information by
paraphrasing, summarising or using direct quotes. A Referral Grade is given when Plagiarism is
identified in your work. There are no exceptions.

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  Your evidence/findings must be cited using Harvard Referencing Style. Please refer to
Reference guiding posted on Moodle. The Reference page is compulsory to upload on Turnitin.

 This assignment should be written in a concise, formal business style using Arial 11 or Times
New Roman 13 font size and 1.5 spacing.

 The word limit is 3,500 words (+/- 10%).

 You MUST complete and submit softcopy of your work on the due dates stated on Assignment
brief. All late work is not allowed to submit. This rule is not waived under any circumstances.

 Read ALL Instructions on this Page and review the Pass, Merit and Distinction criteria carefully.
To pass the assignment, you must achieve ALL the Pass Criteria outlined in the marking sheet. To
achieve a Merit, you must achieve ALL the Merit criteria (and therefore the Pass criteria). To
achieve a Distinction, you must achieve ALL the Distinction criteria (and therefore the Pass and
Merit criteria).

Unit Learning Outcomes

LO2: Prepare basic financial statements for unincorporated and small business organisations in
accordance with accounting principles, conventions and standards.
LO3: Interpret financial statements
LO4: Prepare budgets for planning, control and decision making using spreadsheets
Vocational Scenario, Assignment activity and guidance
SCENARIO 1
Task 1
An Binh, a sole trader, owns An Binh Car Repairs – a small garage in Hanoi. The trial balance of An
Binh Car Repairs on September 30, 2021 is as follows.
An Binh Car Repairs
Trial Balance
September 30, 2021
$ $
Cash 13,000
Supplies 12,100
Prepaid insurance 6,000
Equipment 42,000
Accumulated Depreciation—Equipment 4,200
Account payable $6,500
An Binh’s Capital 50,000
Service Revenue 76,000
Salaries and wages expenses 35,000
Depreciation expenses 4,200
Rent expenses 15,000
Utilities expenses 9,400
Total $136,700 $136,700

Prepare an income statement for the year ending September 30, 2021, and a statement of
financial position as of September 30, 2021.

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Task 2
The trial balance of An Binh Car Repairs before adjustment on October 31, 2021, is as follows.
An Binh Car Repairs
Trial Balance
October 31, 2021
$ $
Cash 15,000
Supplies 12,100
Prepaid insurance 6,000
Equipment 42,000
Accumulated Depreciation—Equipment 4,200
Account payable $12,000
An Binh’s Capital 62,400
Service Revenue 8,500
Owner’ withdrawals 10,000
Salaries and wages expenses 2,000
Total $87,100 $87,100
Other data:
a) Insurance expires at the rate of $500 per month.
b) A count on October 31 shows $11,300 of supplies on hand.
c) The equipment has a 10-year life with no residual value. It is being depreciated at $350
per month.
d) Salaries of $2,500 were unpaid on October 31.
e) A utility bill for $1,000 has not been recorded and will not be paid until next month.
f) Invoices representing $2,100 of services performed during the month have not been
recorded as of October 31.

Make appropriate adjustments and produce an income statement for the month ending
October 31, 2021, and a statement of financial position as of October 31, 2021.

SCENARIO 2
DHHT plc is a large chain of convenient stores. The financial statements for DHHT plc are given below.
Income statement
for the year ended 31 December
2020 2019
$m. $m.
Revenue 100,000 90,000
Cost of sales 65,000 60,000
Gross profit 35,000 30,000
Selling and distribution expenses 3,200 3,000
Administrative expenses 5,000 5,300
Operating profit 26,800 21,700
Interest expense 1,900
400
Profit before taxation 24,900 21,300
Income tax expense 4,980 4,260
Net profit 19,920 17,040

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 Statement of financial position
as at 31 December
2020 2019
$m. $m.
ASSETS
Non-current assets
Land and buildings 38,500 40,000
Equipment 31,000 33,000
69,500 73,000
Current assets
Inventories 5,000 5,500
Trade receivables 3,000 2,500
Cash 7,000 6,000
15,000 14,000
Total assets 84,500 87,000

EQUITY AND LIABILITIES

Equity
Share capital 4,000 4,000
Additional paid-in capital 35,000 35,000
Retained earnings 6,000 8,000
Total equity 45,000 47,000

Non-current liabilities
Long-term borrowings 28,000 28,000
Current liabilities
Trade payables 5,000 6,000
Short-term borrowings 6,500 6,000
11,500 12,000
Total equity and
liabilities 84,500 87,000

1. Calculate and present the following ratios for the year 2020:
a) Total assets turnover
b) Average inventory turnover period
c) Average settlement period for trade receivables
d) Average settlement period for trade payables
e) Net profit margin
f) Gross profit margin
g) ROA
h) ROE
i) Current ratio
j) Quick ratio
k) Debt-to-equity ratio
l) Interest cover ratio

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 2. Using the ratios calculated in (1) and ratios below, compare the performance of DHHT plc
between 2020 and 2019.
Industry
2019 2018 average
1 1
Total assets turnover (times) .14 .12 1.30
Average inventory turnover period (days) 28.30 26.00 27.00
Average settlement period for trade receivables (days) 10.00 9.80 10.00
Average settlement period for trade payables (days) 28.00 26.50 29.00
Net profit margin 18.93% 18.50% 18.00%
Gross profit margin 33.33% 31.50% 32.00%
ROA 21.50% 20.80% 22.00%
ROE 38.40% 36.70% 40.00%
Current ratio (times) 1.17 1.1 1.2
Quick ratio (times) 0.71 0.6 0.8
Debt-to-equity ratio (times) 0.60 0.57 0.55
Interest cover ratio (times) 54.25 56 30

3. Evaluate the performance of DHHT over time using financial ratios with reference to
relevant benchmarks above.
4. Critically evaluate financial statements to assess organisational performance using a range
of measures and benchmarks to make justified conclusions.

SCENARIO 3
HGA Ltd is a merchandiser. The company has a bank overdraft of $20,000 at the beginning of October
and an overdraft limit of $ 50,000. The directors are worried about its liquidity situation over the last
months. As a result, they have recently decided to review their plans for the next three months of the
year 2021.
Sales and purchases are as follows:
September October November December
(actual) (expected) (expected) (expected)
Sales $ 240,000 $ $ 280,000 $ 330,000
revenue 250,000
Purchases $ 120,000 $ $ 150,000 $ 140,000
130,000

a) 30% of sales are for cash, the remainder of sales are on credit terms and collected in the
following month.
b) Suppliers are paid one month in arrears.
c) Staff members will be employed at a cost of $20,000 a month plus 10% of sales revenue which
is paid in the month incurred.
d) Utilities are forecasted to be $6,000 per month and paid one month in arrears.
e) Rent is $15,000 per month payable quarterly during the first week of each quarter.
f) Insurance is $3,000 per month payable annually in advance.
g) The company intends to launch an advertising campaign at a cost of $20,000 in October and
$30,000 in November which is paid in the month incurred.
h) The company plans to buy new equipment in November for 45,000 cash.

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 1. Using spreadsheet, prepare a cash budget for HGA.
2. Discuss the benefits and limitations of budgets and budgetary planning and control for HGA.
3. Identify corrective actions to problems revealed by budgetary planning and control for
effective organisational decision making in HGA.
4. Justify budgetary control solutions and their impact on organisational decision making to
ensure efficient and effective deployment of resources in HGA.
Recommended Resources
Please note that the resources listed are examples for you to use as a starting point in your research –
the list is not definitive.
Textbooks
ATRILL, P. and McLANEY, E. (2018) Accounting and Finance for Non-Specialists.11th Ed. Harlow:
Pearson.
DRURY, C. (2015) Management and Cost Accounting. 9th Ed. Cengage Learning.
SEAL, W. et al (2018) Management Accounting. 6th Ed. Maidenhead: McGraw-Hill.
WEETMAN, P. (2019). Financial and Management Accounting: An Introduction.Harlow: Pearson.
Websites
www.accountingcoach.com
www.accaglobal.com
www.cimaglobal.com
www.corporatefinanceinstitute.com

Learning Outcomes and Assessment Criteria

Pass Merit Distinction

LO2 Prepare basic financial statements for unincorporated and small

business organisations in accordance with accounting principles,
conventions and standards.
P3 Prepare financial statements
from a given trial balance for sole
traders, partnerships and not-for-
profit organisations, to meet
accounting principles,
conventions and standards.
LO3: Interpret financial statements
M2 Produce financial
statements from a given
trial balance, making
appropriate adjustments.
D2 Critically evaluate financial
statements to assess organisational
performance using a range of
measures and benchmarks to make
justified conclusions.

P4 Calculate and present financial

M3 Evaluate the performance of
ratios from a set of final accounts.
an organisation over time using
P5 Compare the performance of
financial ratios with reference to
an organisation over time using
relevant benchmarks.
financial ratios.

LO4: Prepare budgets for planning, control and decision

making using spreadsheets.
D3 Justify budgetary control
P6 Prepare a cash budget solutions and their impact on
from given data for an organisational decision making
M4 Identify corrective actions to to ensure efficient and effective
organisation using a spreadsheet.
problems revealed by budgetary deployment of resources.
P7 Discuss the benefits and
planning and control for effective
limitations of budgets and
organisational decision making.
budgetary planning, and control
for an organisation.

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* Please note that grades are provisional. They are only confirmed once internal and external verifiers
have taken place, and the final decisions have been agreed by the assessment board.
* This grade only reflects the result of this assignment, not for the whole Unit.