Introduction
1. Chic Paints is a large Limited company. Chic Paints is a limited company formerly part of Ashtead PLC. Ashtead PLC had been a long standing manufacturer of everything from bricks to butter.
In 2005 Ashtead PLC decided that its future was no longer viable and therefore decided to change Its business model, over the next few years Ashtead PLC started to sell off or close down those of its subsidiaries that were no longer considered a strategic fit within the organisation.
CPL was put up for sale in 2007, and was subject to a management buyout from its previous owners by five of CPL’s current directors, Greg Pearce, Dave whistler, Ruth Jones, Ahmed Khan and Susan Mather. These five directors have managed the company for
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Financial information required from suppliers would include information to enable them to determine whether to grant credit to Chic Paints Limited.
2.3 HMRC – will require payment of corporation tax, Value added tax, income tax, and national insurance through the PAYE system.
2.4 Bank – the bank require financial accounts such as Management accounts to be presented as a condition of the Loan agreement. The Bank may also request information such as Statement of cash flow.
2.5 Value added Tax act 1994 – VAT is a tax charged on goods and services that VAT registered businesses provide in the UK. Chic Paints accounting staff need to be aware and up to date with current rates of VAT and any changes. There are three rates of VAT depending on the goods or services the business provide, the rates are: Standard – 20% Reduced – 5% Zero – 0%
3.0 Financial Statements
3.1 Income Statement – Shows the profit or loss of the business, it also allows shareholders to see how the business has been preforming and allows directors to fulfil their legal obligation to report on the financial record of the business.
3.2 Statement of Financial position – the main purpose of this statement is to show the company’s assets, liabilities and capital at a given point in time usually prepared at a company’s year-end. This statement does not show the company activity for a whole year.
3.3 Statement of
An income statement, also known as a profit and loss statement shows how much money a company has spent over a period of time. It also shows the costs and expenses that are associated with earning that revenue. It is an important measure of the company’s profitability. The simple building blocks of a net income formula are revenues minus expenses equal net income.
The main purpose of the financial statements is to provide creditors and investors with a summary of a business financial activity. All statements are prepared at certain times throughout the year. The balance sheet reports liabilities, assets, and owner equity of the company. The income statement matches incurred expenses during a period of generated revenue. The statement of retained earnings reports retained earnings from net loss and net incomes from
8. REQUIRED TO TURN IN (in this order): Typed multi-step income statement, Typed statement of retained earnings, Typed classified balance sheet, Typed Perpetual Inventory cards, Handwritten worksheet for uncollectible accounts expense calculations, and Handwritten June Journal Entries, the additional adjusting entries and all necessary closing entries. Be sure your name is on all pages.
(Ohara, 2007) Most financial statements are made public for the benefit of stakeholders and potential investors. The bottom-line is that financial statements are the main source for analyzing how well a company is operating. The income (or profit and loss) statement is simply a report card of how much activity (revenue) was performed in the period, how profitable that activity was (gross profit/loss), and what it cost the contractor to run the business (overhead). (Murphy, 2006)
The income statement (IS) also known as the profit & loss statement provides the net gain or net loss of a business entity. The importance of the income statement is to evaluate profitability of a company (Finkler, Jones, and Koyner, 2013). The best use of the IS,
A company regardless of the type of liability it has must report the interest rate, maturity date, current interest expense, and future
CLASSIFICATION AND UNDERSTANDABILITY- FINANCIAL INFORMATION IS APPROPRIATELY PRESENTED AND DESCRIBED AND DISCLOSURES ARE CLEARLY EXPRESSED .
Income statements generally report on a period matching the standard accounting periods of the business, or may cover a specific period as defined for research purposes. At the core, the income statement provides a key measure of the profitability of a business. This differs from the liquidity or cash on hand of a business, but instead examines the business’ ability to bring in revenues that exceed expenses over a given period of time (Hofstrand, 2009).
36) Which of the following objectives is considered the cornerstone of financial reporting by a governmental entity?
Our team demands that the management provide us with all financial records and related information. We will require that your management team provide us with a letter to confirm management responsibility for the preparation of a financial statement in conformity with GAAP and provide all information necessary in a timely basis for our audit process.
Indirect Taxes relates to VAT and Excise duties. VAT is sales tax which is collected by the business (Tesco) and given to the government. Essentially if increased it would increase the price of Tesco’s products, this subsequently will more often than not lose consumer interest.
The first of the financial statements is the income statement. The income statement states the revenues and expenses in an understandable way that shows a clear picture of net income or net loss for the
Due to this users of the financial statements identifies the merits and demerits of the entity, and also liquidity and solvency including financing.
As the name implies income tax is a percentage of a person’s income but it is not quite as simple as the percentage changes depending on how much you earn on average in a year (See Figure 1) ergo if you make more money you pay a larger amount of income tax, however most people get a ‘Personal Allowance’ of £10,000 a year which you don’t pay tax on therefore if you don’t earn more than this amount you aren’t required to pay any form of income tax. There are certain forms of income which you don’t pay tax for example certain state benefits, interest on savings, rental income below £4,250 and premium bonds.
Capital: The bank needs to know what assets the organization owns that can be quickly turned into cash.