Accounting and Finance Assignment | Essay Help Services
PORTFOLIO ASSIGNMENT 2020
FIRST YEAR PORTFOLIO ASSESSMENT
WRITTEN ASSESSMENT
Answer EITHER section A, OR section B, OR section C
(The assignment is marked on a pass / fail basis)
MN Calculators are permitted
CONTENT OF ASSIGNMENT:
Section A – Financial Accounting
Section B – Financial Literacy and Personal Financial Planning
Section C – Business Law
ANSWER ONE SECTION ONLY
ANSWER EITHER SECTION A, OR SECTION B, OR SECTION C
Although you may attempt any section, you are advised to attempt a section that aligns to a subject area you have studied this year.
Complete your answer in a Word document and submit it on Turnitin before 12.00 (midday) British Summer Time on Friday 12 June 2020.
SECTION A – FINANCIAL ACCOUNTING
1(a) Discuss the content and purpose of the Conceptual Framework for financial reporting. Illustrate your answer with relevant examples.
1(b) Drawing on all your learning this year, identify and explain the five principles of the IFAC Code of Ethics for accountants and discuss why ethical behaviour is important to professional accountants. Illustrate your answer with relevant examples.
(maximum 800 words in total)
SECTION B – FINANCIAL LITERACY AND PERSONAL FINANCIAL PLANNING
2(a) Briefly explain how age, culture and religion might influence attitudes towards credit and borrowing.
2(b) Dave has an overdraft limit of £3,000. The first £250 of arranged overdraft is interest free. The remainder of the arranged overdraft is charged interest at a rate of 1.12% per month. Unarranged overdrafts are not charged interest but are charged a fee of £5 per day, subject to a maximum charge of £80 per month. Dave was overdrawn by £5,000 for the whole of April. Calculate the total cost of this overdraft for the month of April.
2(c) Briefly discuss the risks and rewards of owning your own home compared with renting.
2(d) Briefly discuss why talking about money is historically a “taboo” subject and outline three reasons why talking about money can be a positive experience.
2(e) List the pros and cons of personal car leasing (instead of buying a new car outright).
2(f) Abdul bought a house for £450,000. He put down a deposit of £150,000 and took out a mortgage repayable over 25 years for the balance. Under the terms of his mortgage Abdul has a variable rate of interest which is currently 4.1% APR. Assuming mortgage interest is calculated monthly and the variable rate does not change, estimate Abdul’s monthly mortgage payments using the formula:
| A = P (i + | i | ) |
| (1 + i)n – 1 |
2(g) Chris is 26 years old, employed, and saving up to buy a house. Chris needs to stay on track with his finances and has asked you to assist him to prepare a personal financial plan (i.e. a cash budget). He has supplied the following information to help you:
- Chris earns an annual gross salary of £30,000. From this PAYE of £3,200, NIC of £2,564 and employee pension contributions of £1,500 are deducted for the year. Chris’ net salary (i.e. his take-home pay) is paid on the last working day of each month.
- Chris makes a small amount of money by selling goods on eBay. Although the amount does vary month-on-month, for the purposes of the financial plan Chris believes that an estimate of £150 income per month is reasonable.
- Chris currently lives in a rented apartment with his friend. His monthly rent is £1,200 and household bills, which are split equally between Chris and his friend, total £200.
- Home contents insurance is £60 per annum. Chris renews this insurance annually and the next annual payment is due in August 2020.
- On 1 October 2019 Chris took out a personal loan of £7,000 to buy a second-hand car. The loan is repayable in quarterly instalments of £400 (on 31 December, 31 March, 30 June and 30 September each year).
- Chris pays car insurance of £600 annually in November of each year.
- Chris estimates that his weekly living costs are approximately £100.
- Chris puts £250 per month into a cash ISA. The savings he has accumulated in this ISA are for the deposit on a house.
- On 1 July 2020 Chris had a balance of £2,100 in his bank account.
Prepare a personal financial plan (i.e. cash budget) for Chris for the six months from 1 July to 31 December 2020 in a table. Show each month separately. Where relevant assume there are four weeks in a month. Use Chris’ bank balance at 1 July 2020 as your starting point.
(maximum 800 words in total)
SECTION C – BUSINESS LAW
3 Offer and Acceptance
Marty, the CEO of Turner Plc, sees an advert for an upcoming sale of several bicycles. The advert proclaims that they are “Super Fast, Super Cool and Super Affordable”. The advertisement claims they are to be sold on the 18th June in a super sale of the product. Seeing this, Marty calls Helen (the CEO of Super Bikes Plc) on the 17th of June to see if he could purchase the bicycles early. He is told this is not possible, but he will be able to purchase them tomorrow on the 18th June.
When Marty arrives the next day, the bicycles are not for sale. Instead, the Super Bikes Plc decides to show off its new range of tricycles. Marty did not want the tricycles and claims that Super Bikes Plc has a duty to offer their bicycles for sale as they had promised him he could buy them on the phone yesterday.
Marty meets his lifelong friend Sarah for drinks that evening. During drinks he complains about the actions of Super Bikes Plc. Sarah, who has drank several beers throughout the course of the evening, tells Marty she would love to buy tricycles for her company Adventure Ltd. Marty agrees to buy and deliver the tricycles if Sarah pays his company Turner Plc for the items and delivery. She agrees.
The following week, Marty calls Sarah. Marty tells her “I’ll deliver the goods to you on July 22nd”. Adventure Ltd often gets deliveries from Marty, and Sarah is incredibly busy that day. She has no memories of the tricycles she discussed with Marty beforehand and thinks Marty is referring to a different delivery. She asks for him to deliver on the 23rd July. He says he cannot but would do it if she offered more money. Sarah says: “Fine! 23rd July, and I’ll pay a little more, and if I hear nothing more of this, I’ll take it that this is agreed!”. She puts the phone down. Marty does not call back.
After the phone call, Marty sends Super Bikes Plc an offer for the tricycles in the post. Super Bikes Plc receives the letter, accepts his offer and sends it back to Marty. The reply is lost in the post. Marty doesn’t want to contact Helen, so he simply finds another company and buys their tricycles.
When Marty turns up to Sarah’s on 23rd July, she refuses to take the tricycles, saying she never agreed to them. Super Bikes Plc turn down several other offers to buy the tricycles but never hear from Marty, and never receive their money. The tricycles lose value as a newer model is produced by their competitor in the ensuing weeks.
1) Advise Marty
2) Advise Sarah
3) Advise Helen
(maximum 800 words in total)
