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 2 / Academic year 2021 - 2022

Le Quang Dung/ Nguyen Thi Phuong Hoa/ Pham Thanh Huong/
Unit Assessor(s)
Phan Thi Thanh Loan/ Pham Thi Thuy
AP A2.1: Financial statements and budgeting
Component Number and Title
(Assessment 2 of 2, Individual assignment)
Issue Date Thursday, 21st April, 2022
Submission Date 10.00 am on Monday, 16th May, 2022

Student name Ngo Hoang Tuan Dat

NEU Student ID 10210732 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 Ngo Hoang Tuan Dat Date: 16th May, 2022

Submission format

 This is an individual assignment.

 The submission format is in the form of an E-report. Please refer the “Turnitin Submission Rules”
that was posted on Moodle.
 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 30% 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

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 identified in your work. There are no exceptions.

 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
Hoang Duong, a sole trader, owns HD Dental Clinic – a small dental clinic in Hanoi. The trial balance
of HD Dental Clinic on December 31, 2021 is as follows.
HD Dental Clinic
Trial Balance
December 31, 2021
$ $
Cash 20,000
Medical supplies 9,500
Prepaid rent 30,000
Medical equipment 99,000
Accumulated Depreciation—Medical equipment 15,000
Account payable 21,000
Hoang Duong’s Capital 90,000
Service Revenue 111,500
Salaries and wages expenses 54,000
Depreciation expenses 8,000
Rent expenses 6,000
Utilities expenses 11,000  
Total $237,500 $237,500

Prepare an income statement for the year ending December 31, 2021, and a statement of
financial position as of December 31, 2021.

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Task 2
The trial balance of HD Dental Clinic before adjustment on January 31, 2022, is as follows.
HD Dental Clinic
Trial Balance
January 31, 2022
$ $
Cash 22,000
Medical supplies 15,000
Prepaid rent 30,000
Medical equipment 99,000
Accumulated Depreciation—Medical equipment 15,000
Account payable 19,500
Hoang Duong’s Capital 121,500
Unearned service revenue 5,000
Service revenue 31,000
Owner’ withdrawals 20,000
Salaries and wages expenses 6,000
Total $192,000 $192,000

Other data:
a) HD Dental Clinic pays rent for its premises quarterly in advance. It paid the rent for the first quarter
of the year 2022 ($30,000) on December 31, 2021.
b) A count on January 31 shows $12,000 of medical supplies on hand.
c) The equipment has a 6-year life with no residual value. It is being depreciated at $1,375
per month.
d) Salaries of $2,000 unpaid on January 31 were not included.
e) A utility bill for $1,500 has not been recorded and will not be paid until next month.
f) Unearned revenue of $3,200 was recognized for services performed prior January 31.

Make appropriate adjustments and produce an income statement for the month ending January
31, 2022, and a statement of financial position as of January 31, 2022.

SCENARIO 2
TTG Fashion Center is a large chain of fashion stores. The financial statements for TTG are given below.
Income statement
for the year ended 31 December
  2021 2020
  $m. $m.
Revenue 146,000 160,000
Cost of sales 87,600 91,200
Gross profit 58,400 68,800
Selling and distribution expenses 17,520 17,600
Administrative expenses 7,300 6,400
Operating profit 33,580 44,800
Interest expense 1,900 400

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 Profit before taxation 31,680 44,400
Income tax expense 6,336 8,880
Net profit 25,344 35,520

Statement of financial position

as at 31 December
  2021 2020
  $m. $m.
ASSETS    
Non-current assets    
Land and buildings 40,000 32,000
Equipment 34,000 35,000
  74,000 67,000
Current assets    
Inventories 20,000 12,000
Trade receivables 3,000 2,500
Cash 4,000 6,000
  27,000 20,500
Total assets 101,000 87,500
     
EQUITY AND LIABILITIES    
Equity    
Share capital 4,000 4,000
Additional paid-in capital 35,000 35,000
Retained earnings 10,000 11,500
Total equity 49,000 50,500
     
Non-current liabilities    
Long-term borrowings 32,000 25,000
Current liabilities    
Trade payables 8,000 5,000
Short-term borrowings 12,000 7,000
  20,000 12,000
Total equity and liabilities 101,000 87,500
   
1. Calculate and present the following ratios for the year 2021:
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

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 j) Quick ratio
k) Debt-to-equity ratio
l) Interest cover ratio

2. Using the ratios calculated in (1) and ratios below, compare the performance of TTG
between 2021 and 2020.
Industry
2020 2019 average
1.8 1.
Total assets turnover (times) 5 95 1.65
Average inventory turnover period (days) 32.20 30.50 38.00
Average settlement period for trade receivables (days) 6.15 6.05 6.50
Average settlement period for trade payables (days) 25.00 24.50 26.00
Net profit margin 22.20% 23.00% 18.00%
Gross profit margin 43.00% 43.20% 41.00%
ROA 28.50% 29.40% 27.00%
ROE 51.20% 51.40% 50.00%
Current ratio (times) 1.71 1.83 1.50
Quick ratio (times) 0.71 0.78 0.65
Debt-to-equity ratio (times) 0.50 0.48 0.55
Interest cover ratio (times) 112.00 115.00 50.00
3. Evaluate the performance of TTG 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
SAA Ltd is a merchandiser. The company has a bank overdraft of $33,000 at the end of March 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 four months of the year 2022.
Sales and purchases are as follows:
March April May June July
(actual) (expected) (expected) (expected) (expected)
Sales
$350,000 $360,000 $365,000 $355,000 $340,000
revenue
Purchases $220,000 $240,000 $260,000 $250,000 $245,000

a) 60% 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 $28,000 a month plus 10% of sales revenue which
is paid one month in arrears.
d) Utilities are forecasted to be $8,000 per month and paid in the month incurred.
e) Rent is $20,000 per month payable quarterly in advance during the last week of each quarter.
f) Insurance is $5,000 per month payable annually in advance during the first week of each year.
g) The company intends to launch an advertising campaign at a cost of $35,000 in April and
$55,000 in May which is paid one month in advance.

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 h) The company plans to buy new equipment in April for $20,000 and in June for $46,000 cash.

1. Using spreadsheet, prepare a monthly cash budget for the second quarter.
2. Discuss the benefits and limitations of budgets and budgetary planning and control for
SAA.
3. Identify corrective actions to problems revealed by budgetary planning and control for
effective organisational decision making in SAA.
4. Justify budgetary control solutions and their impact on organisational decision making to
ensure efficient and effective deployment of resources in SAA.
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 M2 Produce financial
traders, partnerships and not-for- statements from a given D2 Critically evaluate financial
profit organisations, to meet trial balance, making statements to assess organisational
accounting principles, appropriate adjustments. performance using a range of
conventions and standards. measures and benchmarks to make
LO3: Interpret financial statements 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.

* 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.

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