Finance for Leisure and Tourism
AC2030N
Autumn semester

Cristina Prodan (ID 10047491)
Contents
Abstract 3 Profit and Loss Account 4
Balance Sheet 5 Accounting concepts 6 Cash flow 7
Financial rations analysis 8 Types of finance 10
Financial and non-financial risk factors 11
Reference 12

Abstract

This report was commissioned by Mr Camlegg, and it focuses on explaining the main issues considered when preparing the financial statements. The financial statement is for a small private company run by Mr and Mrs Camlegg organizing children’s events. The report explains key objectives while calculating the profit and loss account, balance sheet and cash budget, in order to understand the financial position of the business.
The report also focuses on investigating the performance of Camlegg Ltd. by using financial statements such as Balance sheet and Income statement.
Part A 1.1 Profit and Loss accountCamlegg Ltd | Profit and Loss account for the year to | 31 December 2010 | | | | | | | Dr | Cr | | | £'000 | £'000 | | | | | Sales | | | 3100 | Less cost of sales | | | | Opening stock | | 144 | | Purchases | | 2180 | | | | 2324 | | Less closing stock ( at 31.12.2010) | 120 | | | | | 2204 | Gross Profit | | | 896 | Less: Expenses | | | | Electricity | | 43 | | | | | | Insurance | | 17 | | Director's salaries | | 105 | | Rent and Rates | | 82 | | Wages and salaries | | 140 | | Office expenses | | 55 | | Legal fees (8+2) | | 10 | | Repairs | | 25 | | Depreciation (30+56.25) | | 86 | | | | | 563 | Profit on ordinary activities | | 333 | Bank Interest | | | 4 | | | | | Profit before tax | | | 329 | Taxation | | | 2 | Profit after taxation | | | 327 | Ordinary dividends proposed | | 25 | | | | | Retained profit for the year | | 302 | Profit and Loss Account B/F | | 126 | Profit and Loss Account C/F | | 428 | | | | |

1.2 Balance Sheet | | | | | | Balance sheet at 31.12.2010 | | | | | | | | | | | | | | Cost | Accum | NBV | | | | Dep'n | | | | £'000 | £'000 | £'000 | | | | | | Fixed Assets | | | | | | | | | Motor Vehicles | 150 | 60 | 90 | Fixtures and Fittings | 400 | 231 | 169 | | | | | 259 | | | | | | Current Assets | | | | Bank | | | 122 | | Closing stock (31.12.2010) | 120 | | Debtors | | | 320 | | Rent paid in advance | | 3 | | | | | 565 | | | | | | | | | | | | Current liabilities | | | | Creditors | | 67 | | | Corporation tax | 2 | | | Accruals | | 2 | | | Dividends | | 25 | | | | | | 96 | | | | | | | | | | | | Net Current Assets | | | 469 | | | | | | Non-Current Liabilities | | | | Bank Loan | | | | 50 | | | | | | Net Assets | | | | 678 | | | | | | Financed by: | | | | Ordinary Share Capital | | | 250 | Profit and Loss account | | | 428 | | | | | | Net Assets | | | | 678 |
2. Accounting concepts
There are certain accounting concepts that were used in the preparation of the Financial Statements for Camlegg Ltd. The main concepts used are going concern, consistency, prudence, matching and accruals, money measurement and historic cost. * Going concern – represents the idea that the company has the resources needed in order to continue to operate in the foreseeable future and will not liquidate its assets. * Consistency – it is a uniformity of successive results. This represents the idea that once a financial method has been adopted it should be applied from one year to the next. The financial statements of Camlegg Ltd. show the depreciation of the motor vehicles and the fixtures and fittings. * Prudence – represents the careful management of finances. Dyson