FINA1161 – Introduction to Finance for Business – Assessment 1 Case Scenario Brief

and questions

Assessment 1 - Report 1 Instructions

Please read the following scenario brief and complete the tasks after it. The report has a
wordcount limit of 500 words +/-10% and there is penalty of a deduction of 5 points from
your final mark if you go outside the wordcount limits. References are not included in the
final wordcount.
Submission via Moodle by 10 NOV 2023, 11.30pm.

Case Scenario & Tasks

Inbal Berardi is an artist and designer, and he set up a new business called ApecCards on
the 1st April 2023, selling homemade handprinted cards that are designed by himself.
Inbal Berardi has prepared the profit and loss statement and balance sheet for his first
month of operations. He has been invited to attend a meeting with an interested investor at
Prosperity Investors, who has asked Inbal Berardi to bring along his first month's profit and
loss statement and balance sheet. The potential investor asked Inbal to explain the
associated transactions that produced each line of accounts in both financial statements and
how it would help him understand his first month of operation.
Inbal Berardi has asked you to help him prepare the following:
a) Write a brief report to present to the investor outlining the information he has
requested.
b) How do you think Inbal Berardi’s business has performed in its first month of
operations, and explain your assessment using the numbers from the statements
below?

ApecCards: Profit & Loss Statement for the month ending 30

April 2023

£ £
Revenue - Sales of 800 cards 6,400

Cost of Sales:
Purchase during April – 1,000 blank cards 1,000
Less closing inventory as of 30/04/2023 -
(1,000-800) 200 blank cards (200)
Cost of Sales: 800 blank cards (800)
Gross Profit 5,600

Expenses
Store Rental 5,000
Mobile Phone Contract Rental 100
Electricity 600
Store insurance 560
Sales entertaining 125
G&F Marketing Consultancy 2,000
(8,385)
 Loss for March 31st, 2023 (2,785)

ApecCards: Balance Sheet at 30 April 2023

ASSETS £ £
Non-current Asset
Printing Machine 750

Current Assets

Bank Account 31,565

Accounts Receivable 200

Closing Inventory 200

31,965
32,715

Capital and Liabilities

Initial Capital 35,000
Retained earnings (2,785)
32,215
Current Liabilities
Trade Payables 500
500
32,715

Please use at least 3 but no more than 5 reference sources in your answer.

References
Note to student: Please include all references in the Harvard format. Do not only use
textbooks but use journal articles to support your work. The format for the Harvard style is:

Books are in this format:

Bryman, A., Bell, A. and Harley B. (2018) Business Research Methods (5th edition). Oxford
University Press: Oxford, UK.

Journals are in this format:

Irvine, A., Drew, P. and Sainsbury, P. (2012) ‘Am I not answering your questions properly?’
Clarification, adequacy and responsiveness in semi-structured telephone and face-to-face
interviews. Qualitative Research 13(1) 86-106.

Examples of journal names to search in to find citations for your report.

Accounting Review, Accounting, Organizations and Society, Journal of Accounting and
Economics, Journal of Accounting Research, Contemporary Accounting Research and
Review of Accounting Studies.