ITSA Excel Assignment 2011 - Level 5(1) (1)

8/7/2019 ITSA Excel Assignment 2011 - Level 5(1) (1)

1/5

ITSA EXCEL ASSIGNMENT

IMAGE SELECT MEDIA LTD

Image Select Media Ltd is a media company creating film and media products. It

purchases labour and supplies from a range of specialist suppliers and sells mainly tocustomers buying over the internet but does have a small DVD outlet open to the

public at its rented premises in West London. The outlet also carries out a small

amount of photography and printing work.

The following information is provided to you on 1st April 2011 and you are to

complete this exercise as if at that date.

Sales over the internet for January, February and March 2011 were 40,000 each

month. Outlet sales in March were 4000. Forecast monthly sales are as follows:

April May Jun Jul Aug

SeptInternet: 50,000 90,000 110,000 120,000 85,000

95,000

Shop: 4,500 6,000 10,500 8,000 9,000

10,000

Image Select Media offers an instalment arrangement to its internet customers

whereby purchasers can pay in 5 monthly instalments. To take advantage of this

arrangement customers have to pay a supplement of 3% on top of the basic sales

value, the total amount (sales value plus supplement) is then paid in 5 equal monthly

instalments with the first instalment being paid in the month the sale occurs. In recent

months 85% of internet customers have opted for this arrangement. The remaining

customers pay the sales value in full at the time of purchase. All shop sales are paid in

full at the time of purchase.

Note 1 the sales of January, February and March were made under these terms andwill not change even if it is decided to change terms for future sales.

Note 2 the forecast figures and the figures for January, February and March are thebasic sales value before any supplement. The total figure (sales value plus

supplement) is treated as sales in the financial statements and any sales receipts

outstanding including supplement are regarded as debtors.Note 3 Image Media Select may want to see the effect of varying the proportion of

instalment sales and the supplement charge but the 5 month instalment period is fixedi.e. there is no requirement for the number of months to vary this will always be

over 5 months.

In addition to media sales, income from photography work is fairly constant at 1,000

a month. Customers pay cash for photographs. The overhead for providing

photographic work averages 25% of the income.

Closing stock at the end of each month is equal to 120% of the cost of media forecast

to be sold the following month. Film and media products are purchased for 60% of the

value they are sold for before any supplement (ie cost of goods sold = 60% of basic

sales value). Purchases of film and media are 40% for cash with the 60% credit


2/5

purchases being paid for 1 month later. Purchases of film and media products in

March was 38,370.

The balance sheet of Image Select Media at the end of March 2011 was as

follows:

31 March

Fixed assets 125,000

Depreciation 31,200

Net book value 93,800

Stock - film & media 47,300 (opening stock on 1st March 2011 was 31,680)

Debtors 46,800

Pre paid insurance 1,962Cash 20,000

Interest receivable 83

Total current assets 116,145

Creditors (including

Accrued commission) 28,560

Overdraft 0

Interest payable 0

Total current liabilities 28,560

Net Assets 181,385

Share capital 100,000

Retained profit 81,385

181,385

Image Select Media expenses are as follows:

Wages of 7,500 are paid monthly in the month earned

The firm that designed, hosts and maintains Image Select Medias website does not

charge directly for these services but instead charge a commission of 5% on all sales

made via the internet (including on any supplement charged for instalment

arrangements). The commission is regarded as an expense of the month the sale takes

place but the commission is paid in the month(s) Image Select Media receives the

receipts from those sales. i.e. commission is paid in the month of sale for sales paid in

full and is paid on receipt of each instalment for instalment sales.

Rent of 6,000 is paid each month for that month.

Insurance of 2,616 is paid annually in January and charged to profit and loss evenlyat 218 per month


3/5

Depreciation of 2% (of opening net book value) is charged each month on a reducing

balance basis

Interest is earned monthly on positive cash balances at the rate of 4% per annum.Interest is charged monthly on overdrafts at the rate of 12% per annum

In both cases interest is calculated on the closing cash balance before interest and is

regarded as income or expense of that month but is not received or paid until the

following month. (interest receivable/payable is in the Balance sheet as a current

asset/liability)

Miscellaneous expenses of 5% on all sales (excluding any supplement for instalment

arrangements) are paid in the same month as the sales.

Required:

1. Using a spreadsheet, produce a monthly cash budget for the 5 month period from

April to August 2011. The cash budget should allow the user to change planning

values and immediately see the effect of these changes.

2. Produce monthly projected Income Statements (Profit and Loss Accounts) for the

months April to August. The Income Statements should also respond to changes in

planning values.

3. Produce monthly projected Balance Sheets for the period April to August 2011.

The Balance Sheets should respond to changes in planning values.

4. a) Create a chart to show how:

i) total net profit from April to August varies with changes in cost of

goods sold

ii) closing cash in August

b) Write a brief report to the finance director of Image Select Media explaining

your findings.

You will upload the completed assignment onto blackboard, your full name and

student number must be clearly stated on all pages.

Hand in a word processed report plus a disk, CD or cheap memory stick containing

the spreadsheet file.

.

There must be no other files on the disk/CD/stick other than your assignment files.

Note 1. A file copied from another students disk is detectable even if extensive

modifications are made or the file is transferred to another disk. It is not acceptable tocopy even a skeleton layout from another student and complete the workings yourself.


4/5

This will be detected. You must build up your work from scratch yourself. Do not

allow other students access to your disks. Your attention is drawn to the University's

policy on plagiarism.

Note 2. File management is part of good IT skills. You must save work at frequent

intervals and back up regularly. "I lost my disk", or "I can't print out because of a disk

error" etc will not be acceptable excuses. You must always have a recently savedbackup copy

Note 3. On attaching disks etc.

If using sticky tape do not tape down more than 2 sides of the disk.

If sealing a plastic envelope using staples do not staple through the assignment as

well. You should be able to remove it and put it back easily.

Mark allocation and Assessment Criteria:

Marks will be allocated to each part as follows:

Part 1 35%

Part 2 20%

Part 3 20%

Part 4 20%Clarity and presentation of spreadsheet printouts 5%

100%

Note: in parts 2 and 3 amounts which have already been calculated in part 1 and

awarded marks will not be allocated further marks ( nor will errors made in part 1

which are repeated in parts 2 and 3 be regarded as new errors). However amounts

already calculated in part 1 that also appear in parts 2 and 3 but with different timing

will have marks allocated for correct timing.

Pass (40-49): in order to pass the assignment you should have made a reasonable

attempt at the cash budget, income statement and balance sheet, showing an

awareness of the use of spreadsheet formulae and use of planning values. Your report

should also have shown some appreciation of the meaning of the results.

Lower Second (50-59): in addition to meeting the criteria for a pass, there should be

very few mistakes in parts 1, 2 and 3 and a reasonable attempt made at producing the

correct data tables in part 4. Your report should demonstrate a good appreciation of

the results. Layout and formatting should be clear.

Upper Second (60-69): in addition to meeting the criteria above, parts 1, 2 and 3 of

the spreadsheet should be virtually error free. The spreadsheet should be flexible and

robust, giving correct answers when any of the planning values are changed. Layouts

and formatting will also be appropriate very clear. The data tables should be correct

and the report should demonstrate a firm grasp of the results with a correctinterpretation thereof.

First (70+): in addition to meeting the criteria above you will have demonstrated a

high level of understanding of spreadsheet modelling. There will be evidence of

original thinking in your spreadsheet design and formatting. Parts 1, 2 and 3 will be

error free and the model will respond accurately to all possible changes in planning

values. Your data tables will be correct and clearly presented. Your report should be

clear and demonstrate an excellent understanding of the results and the significance to

those results of changes in planning values.


5/5

Documents

ITSA Excel Assignment 2011 - Level 5(1) (1)