Remote Space is a Birmingham commercial real estate company that provides shared workspaces for small enterprise start-ups. The design of the office space allows for: individual and shared offices; hot desking; meeting rooms and event functions. Remote Space is also fully equipped with the latest technological equipment.
Assignment
| Programme Title | BA/FdA BE/MM | |
| Module Title | Principles of Finance | |
| Module Code | 1451 | |
| Assignment Title | Financial Statements | |
| Level | 4 | |
| Weighting | 100% | |
| Lecturers | A Dufficy | |
| W/C Hand Out Date | 12/10/2020 | |
| Due Date | By 17:00 on 20/11/2020 | |
| Feedback Post Date | 18/12/2020 | |
| Assignment Format | Report | |
| Assignment Word Count | 2000 | |
| Presentation Duration | Click here to enter text. | |
| Module Learning Outcomes covered in this assignment | 1) Undertake financial decisions based on financial information available.
2) Investigate cost concepts and their application to the decision making process. |
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| Submission Format (include ATS key for hard copy submission | e-Submission | Individual |
| ATS Code | Click here to enter text. | |
Assignment Brief
Remote Space is a Birmingham commercial real estate company that provides shared workspaces for small enterprise start-ups. The design of the office space allows for: individual and shared offices; hot desking; meeting rooms and event functions. Remote Space is also fully equipped with the latest technological equipment.
Throughout the building there are a selection of coffee lounges and casual diners where customers can network with other like-minded entrepreneurs.
However, despite the promising interest and demand from the local entrepreneurial community, Remote Space are reporting comparatively disappointing figures. For example: Remote Space have stated that their attendance for the last financial year was 50,000 customers – down over 20% from the previous year.
The owners of Remote Space attribute this decline to the Corona Virus and the ‘lockdown’ imposed in Birmingham earlier in the year. The owners are, therefore, very apprehensive about the future – particularly if further restrictions are imposed.
Trial Balance for Remote Space at 31st August 2020
| Debit | Credit | |
| £ | £ | |
| Sales | 1,051,320 | |
| Bank | 30,792 | |
| Bank Loan | 255,900 | |
| Capital | 164,500 | |
| Trade Receivables | 28,300 | |
| Trade Payables | 15,289 | |
| Food & Drink Purchases | 88,458 | |
| Stock of Food & Drink at 1st Sept. 2019 | 19,500 | |
| Rent & Rates | 205,654 | |
| Salaries & Wages | 362,977 | |
| Motor & Travel Expenses | 14,300 | |
| Insurance | 78,722 | |
| Advertising | 86,855 | |
| Fixtures & Fittings | 75,280 | |
| Kitchen Equipment | 38,000 | |
| Computers and IT Equipment | 264,880 | |
| Motor Vehicles | 52,400 | |
| Telephone/Internet/Sky | 43,300 | |
| Professional Charges | 10,205 | |
| Loan Interest | 23,786 | |
| Repairs and Maintenance | 10,399 | |
| Miscellaneous Expenses | 17,485 | |
| Drawings | 97,300 | |
| 1,517,801 | 1,517,801 | |
| Notes to the trial balance | ||
| 1) Closing stock of Food & Drink at 31st August 2020 was £42,577 | ||
| 2) Depreciation of Fixtures & Fittings at 15% | ||
| 3) Depreciation of Kitchen Equipment at 10% | ||
| 4) Depreciation of Computers and IT Equipment at 20% | ||
| 5) Depreciation of Motor Vehicles at 10% | ||
| The following data has been extracted from the | |||||
| operating budgets for Remote Space | |||||
| Income from | Income from | Food & | Salaries | Overheads | |
| Hire of | Food & | Drink | and | ||
| Work space | Drink | Purchases | Wages | ||
| May | 86,400 | 22,300 | 12,400 | 30,500 | 19,400 |
| June | 82,200 | 19,700 | 10,200 | 29,400 | 18,200 |
| July | 78,600 | 14,800 | 8,500 | 26,300 | 17,000 |
| August | 74,200 | 12,600 | 7,300 | 25,000 | 15,600 |
| It is estimated that approximately 80% of income from the hire of work space is received on | |||||
| a cash basis and 20% is received after one month. | |||||
| Income from food and drink sales are received in the month they incur. | |||||
| Food and drink purchases are paid on one month credit. | |||||
| Salaries and wages are paid in the same month that staff work. | |||||
| Overheads are paid one month in arrears | |||||
| A new 3D Pinter is to be acquired in June at a cost of £90,000. 60% of this cost will be paid | |||||
| in June, the remainder will be paid the following month. | |||||
| The opening bank balance for June is expected to be £22,500
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Assignment Task
Remote Space have provided you with a trial balance and data (as presented above) from their operating budgets. They have requested that you complete the following:
- Prepare an Income Statement for the year ended 31st August 2020
- Prepare a Statement of Financial Position as at 31st August 2020
- Calculate their Breakeven point in terms of numbers of customers required and their Margin of Safety%
- Note: Use the information contained in your Income Statement and assume that the total expenses figure is split: Fixed Costs 55% and Variable Costs 45%.
- Prepare a Cash Budget for the three months ended 31st August 2020.
- Based on the statements you have prepared, identify three key findings and briefly discuss what these tell you about the financial performance of Remote Space (approximately 100-200 words).
- Based on your key findings, provide three recommendations you would advise Remote Space to consider in order to improve their financial performance (approximately 100-200 words).
Task Guidance
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General Assignment Guidance
Principles of Finance Assignment 1
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