AAT ICAS Essay

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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…show more content…
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

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