Question 3 assesses Unit 1, Session 3: Financial accounting requirements, standards, concepts and formats.

On 31 December 2021, at the end of the first year of trading as a company, Hannahs accountant produced the following information for Hansimi Pet Supplies Ltd.

Sales	599,625
Cost of sales	230,430
Administrative expenses	116,231
Distribution costs	21,365
Finance costs	5,000
Corporation tax	60,000
Total non-current assets at net book value (NBV)	450,000
Total current assets	140,000
Total non-current liabilities	10,000
Total current liabilities	313,401
Ordinary share capital	100,000

Required

• a.Set out the format for the statement of financial performance for Hansimi Pet Supplies Ltd and insert the relevant amounts from the table above in the appropriate places. In the process calculate:
  • gross profit
  • profit before interest and tax
  • profit before tax
  • net profit.

  (6 marks)

• b.Set out the format for the statement of financial position for Hansimi Pet Supplies Ltd and insert the relevant amounts from the table above in the appropriate places. In the process calculate:
  • total assets
  • total equity
  • total liabilities
  • total equity and liabilities.

  (6 marks)

• c.Describe the main differences between the statement of financial performance for Hansimi Pet Supplies Ltd you prepared in part a) and how Hanah Simiras sole trader financial statements would have presented the information. Use the examples of:
  • Sam and Vera's salaries
  • taxation

  Explain the reasons for these differences.

  Use no more than 150 words.

  (5 marks)

• d.Describe the main differences between the statement of financial position for Hansimi Pet Supplies Ltd you prepared in part b) and how Hanah Simiras sole trader balance sheet would present the information. Use the examples of:
  • the layout of the non-current assets section
  • the accounts reflected in the equity section

  Explain the reasons for these differences

  Use no more than 120 words.

  (4 marks)

• e.

  • Comment on how much dividend Hansimi Pet Supplies Ltd could pay its shareholders? Why?
  • If Hanah Simira receives a salary from Hansimi Pet Supplies Ltd, how would the salary be accounted for in the financial statements of the company? How would this affect the companys profit before tax and corporation tax charge.

  Use no more than 120 words.