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

Case Scenario & Tasks

Shereen Spicer-Ali set up a new business called Special for You, on the 1 st March 2023,
selling handprinted white T-shirts.
She has prepared the profit and loss statement and balance sheet for her first month of
operations. She has been invited to attend a meeting with an interested investor at
Prosperity Investors, who has asked her to bring along her first month's profit and loss
statement and balance sheet. He has asked her to explain the associated transactions that
produced each line of accounts in both financial statements, and how it will help her in
understanding her first month of operation. In addition, he asked that she provide full
details of all customers and suppliers names associated with each transaction. She has asked
you to help her prepare the following:
1) Write a report to present to the investor outlining the information he has requested
2) How do you think your business has performed in its first month of operations, and
explain your assessment using the numbers from the statements?

Special for You Clothing – Profit & Loss Statement for the month ending
March 31 March 2023

£ £
Revenue - Sales of 100 T-shirts 4,000

Cost of Sales:
Purchase during March- 500 T-shirts 5,000
Less closing inventory as of 31/03/2023 - (500-
100) 400 T-shirts -4,000
Cost of Sales: 100 T-shirts 1,000
Gross Profit 3,000

Expenses
Store Rental 7,500
Mobile Phone Contract Rental 100
Electricity 600
Store insurance 560
Sales entertaining 125
 Marketing 3,000
11,885
Loss for March 31st, 2023 -8,885

Special for You Clothing - Balance Sheet at March 31 March 2023

ASSETS £ £
Non-current Asset
Chronos T-Shirt Printing Machine 20,000

Current Assets
Bank Account 3,115
Accounts Receivable 2,000
Closing Inventory 4,000
9,115
29,115

Capital and Liabilities

Initial Capital 35,000
Retained earnings -8,885
26,115
Current Assets
Trade Payables 3,000
3,000
29,115

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.