principles of accounts sba
TRANSCRIPT
Principles of Accounts
School-Based Assessment
On Blanna’s Fashion Boutique
Submitted by : Anna Kay Blake
Registration number: 1000290074
Submitted To: The Donald Quarrie High School
School code: 100029
Territory: Jamaica
This project is submitted in partial fulfillment of the requirements for certification in Principles of Accounts by the Caribbean Examinations Council (CXC)
Title Page
Accounting Records
Of
Blanna’s Fashion Boutique
Acknowledgement
I would like to express my sincere gratitude to all the persons who have
been helpful towards the successful completion of this assignment. First and
foremost I would like to thank Shadae Russell, Shakeyra Millington, Jonathon
Butler and Ovasha Bartley for their support and assistance towards carrying out the
research to complete this assignment. Secondly I want to thank my guardians for
providing me with the suitable materials to finalize this assignment. I would also
like to thank Mrs. K. Elliot for her assistance and guidance in completing this
project. Last but certainly not least I would like to thank God for his extended
mercies unto me.
Introduction
This assignment is about a business that started approximately three (3)
years ago which is situated in a busy area that allows it to generate large amounts
of money each day to carry out its operations. This assignment contains all the
information about this Blanna’s Fashion Boutique business. The information which
this assignment contains includes the financial records for the period ending
September 30 2011. This assignment serves to keep track of all the money that
goes inside the business bank account, all the cash which the business uses within
visiting the business bank account, all the money that goes outside of the business
bank account, all the money that came into the business by cash and not with the
use of cheques and the purposes for each transaction. Therefore this assignment
provides a clear understand of all the operations the business under goes on a day
to day basis.
Table of Contents
Headings Page #
Cover Page I
Title Page II
Acknowledgement III
Introduction IV
Aim of the Project 1
Description of Business Entity 2
Mission Statement 3
Logo and Slogan 4
Accounting Cycle 5
Accounting Information
Journals 6-7
Cash Book 8
Ledgers 9-13
Trial Balance 14
Stock Valuation 15-19
Trading, Profit and Loss and Appropriation A/c 20-21
Balance Sheet 22
Bank Reconciliation Statement 23
Accounting Ratios 24-25
Performance of the Business 26
Comparisons 27
Recommendations and Suggestions 28
Conclusion 29
Appendix
Price list (showing mark up %) 30
Diagrams
Charts and Graphs
Pictures
Invoices, Cheques, Receipts etc
References
Aim of the Project
The aim of this project is:
To arrive at a comprehensive understanding of the financial sector of
businesses.
To highlight the strength and the weaknesses of the Blanna’s Fashion
Boutique business.
To present the financial records for the year ended September 30, 2011 for
Blanna’s Fashion Boutique business.
Description of Business Entity
Blanna’s Fashion Boutique is a partnership. This business is owned and
operated by Anna Kay Blake, Shadae Russell and Ovasha Bartley a Group of
ambitious young ladies. Our main aim is to make a profit while catering for the
needs of the community which it is situated in. Blanna’s Fashion Boutique is
situated in Montego Bay at the Blue diamond plaza 10 Pearl Street. This business
has been in existence since June 20, 2008. We employ approximately fifteen (15)
workers. We cater for the petite to the full figured women. We produce a wide
variety of slippers, pants, skirts, handbags and accessories. Prices are always lower
than that of our competitors. In cases of fashion emergencies you can call us at
(1876) 3553980/4275646 or email us at Blanna’[email protected].
The mission of Blanna’s Fashion Boutique is to:
Blanna’s Fashion
Boutique
Mission Statement
Provide the latest fashion for all females
Provide goods and services at a reasonable cost
Ensure that the quality of our goods meets the standards of our business.
Ensure that whatever the business do doesn’t affect the environment
negatively.
Provide employment for members of the community
Provide sponsors to underprivileged children
Logo and Slogan
Logo
Slogan
With passion we send out the latest fashion
Accounting Cycle
General Journal
Date Details Folio Debit CreditSeptember 1
Bank CB01
364000
Page
Cash CB01 27160
Debtor (J. Simpson) SL01 31600
Motor Van GL02 62840
Building GL03 100000
Stock 24960
Creditor (Super Supreme) PL01 10560
Capital GL01 600000
Opening entries 610560 610560
Purchase journal Page 01
Date Details Folio Amount 1-Sep Super Supreme International PL01 23
7,040 27-Sep Super Supreme International PL01 5
7,960 Sep 30 Total credit purchases to be transferred to the
purchases account in the general ledgerGL02 29
5,000
SALES JOURNAL
Date Details Folio Amount 5-Sep J. Simpson SL01 57000
13-Sep B. Banton SL03 78,550
20-Sep N. Kidman SL02 104,400
Sep 30 Total credit sales to be transferred to the sales account in the general ledger
GL13 239,950
RETURN OUTWARDS JOURNALDate Details Folio Amount
9-Sep Super Supreme International PL01 13,600
Sep 30 Total return outwards to be transferred to the return outwards account in the general ledger
GL16 13,600
Return Inwards Day BookDate Details Folio Amount
24-Sep B. Banton SL03 16,800
30-Sep N. Kidman SL02 9,600
Sep 30 Total goods returned to us to be transferred to the return inwards account in the general ledger
GL15 26,400
Cash Book
Date Details Folio Discount Allowed
Cash Bank Date Details Folio
Discount Received
Cash Bank
September 1 Balance b/d GJ01 27,160
364,000 September 1 Machinery GL3 48,000
September 2 Bank C 50,000 2 Cash C
50,000
3 Sales GL13 59,350 3 Rent GL4
30,000
7 Sales GL13 37,750 6 Fixtures GL5 65,000
18 J. Simpson SJ01 12,000 45,000 8 Wages GL12 10,000
29 B. Banton SJ03 6,175 55,575 11 Insurance GL6 6,100
30 Sales GL13 120,540 11 Electricity GL7 3,300
11 Rates GL8 2,600
15Super Supreme International PL01 7,500 142,500
15 Wages GL12 10,000
16 Drawings GL10 6,200
19 Furniture GL11
3,600
22 Wages GL12
10,000
29 Wages GL12
10,000
30 Balance c/d 123,075 239,
000
18,175 350,375 409,000 7,500 350,375
409,000
General Ledger
Date DetailsFolio
Amount Date Details
Folio Amount
Capital A/C Page 01September
31 Balance c/d
600,000 September 1 Balance b/d GJ01
600,000
October 1 Balance b/d 600,000
Motor Van A/C Page 02September 1 Balance b/d GJ12
62,840 September 30 Balance c/d
62,840
October 1 Balance b/d 62,840
Buildings A/C Page 03September 1 Balance b/d GJ01
100,000 September 30 Balance c/d
100,000
October 1 Balance b/d 100,000
Machinery A/CSeptember 1 Bank CB01
48,000 September 31 Balance c/d
48,000
October 1 Balance b/d 48,000
Rent A/C September 3 Bank CB01
30,000 September 30 Profit & Loss
30,000
Page 4
Page 5
Fixtures A/C September 6 Cash
CB01
65,000 September 31 Balance c/d
65,000
October 1 Bal b/d 65,000
Insurance A/C
September
11 Bank
CB01
6,100 September 30 Profit & Loss
6,100
Electricity A/C
September
11 Bank
CB01
3,300 September 30 Profit & Loss
5,500
30 Accruals c/d
1,200 5,500
5,500
October 1 Accruals b/d 1200
RatesSeptember
11 Bank
CB01
2,600 September 30 Profit & Loss
2,600
Drawings
September
16 Cash
CB01
6,200 September 30 Balance c/d
6,200
September
30 Balance b/d
6,200
FurnitureSeptember
19 Cash
CB01
3,600 September 30 Balance c/d
3,600
October 1 Balance b/d 3,600
Page 10
Page 11
Page 6
Page 7
Page 8
Page 9
Wages
September 8 Bank C01
10,000 September 31 Profit & Loss
40,000
15 Cash C01 10,000
22 Bank C01 10,000
29 Bank C01 10,000 40,000
40,000
Sales September
30 Trading Account
457,590 September 3 Cash CB01
59,350
September 7 Cash CB01 37,750
September 30 Cash CB01 120,540
September 30 Total Credit Sales SJ01 239,950
457,590
457,590
Purchases September 31
Total Credit Purchases PJ01
295,000 September
31 Trading Account
295,000
Return Inwards September 31 Total for month RI01
26,400 September
31 Trading Account
26,400
Return Outwards September
31 Trading Account
RO01
13,600 September 31 Total for month
13,600
Page 15
Page 16
Page 14
Page 13
Page 12
Discount Allowed
September 30
Total Discount Given to customers 18,175
September 30 P & L
18,175
Discount Received September 30 P & L
7,500 September
11
Super Supreme International
7,500
Purchases Ledger
Super Supreme International September 9 Return Outwards
RO01
13,600 September 1 Balance b/d GJ01
10,560
15 Bank CB01
142,500 1 Purchases PJ01
237,040
15
Discount Received CB01
7,500 27 Purchases PJ01
57,960
30 Balance c/d
141,960 305,560
305,560
October 1 Balance b/d 141,960
Sales Ledger J. Simpson
September 1 Balance b/d
31,600 September 18
Discount Allowed CB01
12,000
September 5 Sales SJ01
57,000 September 18 Bank CB01 45000
September 30 Balance c/d 31,600
Page 01
Page 01
Page 17
Page 18
88,600 88,600
October 1 Balance b/d 31,600
N. Kidman
September
20 Sales
SJ01
104,400 September 30 Return Inwards RI01
9,600
September 30 Balance c/d 94,800
104,400
104,400
October 1 Balance b/d 94,800
B. Banton September
13 Sales
SJ01
78,550 September 24 Return Inwards RI01
16,800
September 29Discount Allowed CB01
6,175
29 Cash CB01 55,575
78,550
78,550
Page 03
Page 02
Trial Balance
Blanna’s Fashion BoutiqueTrial Balance as at September 30, 2011
Details Debit $ Credit $
Capital 600,000
Motor VanBuildings 100,000 Machinery 48,000 Stock 24,960 Rent 30,000 Fixtures 65,000
Sales 457,590
Purchases 295,000 Cash 123,075
Bank 239,000 Wages 40,000
Return Outwards 13,600
Super Supreme International 141,960
Electricity 3,300 Insurance 6,100 Rates 2,600 Furniture 3,600 Drawings 6,200 Return Inwards 26,400 N. Kidman 94,800 J. Simpson 31,600
Discount Received 7,500
Discount Allowed 18,175
1,220,650 1,220,650
Stock Valuation
(A) Pants
Date
Received Issued Balance
Quantity
Unit Price
Amount
Quantity
Unit Price
Amount
Quantity
Unit Price
Amount
1-Sep
12
900 10,800
1-Sep
96
1,000
96,000
12
96
900
1,000
10,800 96,000
3-Sep
12
12
900 1,000
10,800 12,000
84
1,000
84,000
5-Sep
12
1,000
12,000
72
1,000
72,000
13-Sep
24
1,000
24,000
48
1,000
48,000
20-Sep
24
1,000
24,000
24
1,000
24,000
27-Sep
36
1,100
39,600
2436
1,0001,100
24,00039,600
30-Sep
24
12
1,000 1,100
24,000
13,200
24
1,100
26,400
(B) Blouse
Date
Received
Issued
Balance
Quantity Unit Price
Amount Quantity Unit Price
Amount Quantity Unit Price
Amount
1-Sep
12
400
4,800
1-Sep
96
440
42,240
12
96
400
440
4,800 42,240
5-Sep
12
12
400 440
4,800
5,280
84
440
36,960 13-Sep
24
440
10,560
60
440
26,400
20-Sep
36
440
15,840
24
440
10,560
30-Sep
12
440
5,280
12
440
5,280
(C ) Handbag
Date
Received Issued BalanceQuantit
y Unit Price
Amount Quantity
Unit Price
Amount
Quantity
Unit Price
Amount
1-Sep
4
1,600
6400
4
1,600
6,400
3-Sep
1
1,600
1,600
3
1,600
4,800
7-Sep
1
1,600
1,600 2
1,600
3,200
13-Sep
1
1,600
1,600 1
1,600
1,600
27-Sep
4
1,650
6,600
1
4
1,600
1,650
1,600 6,600
30-Sep
1
3
1,600 1,650
1,600 4,950
1
1,650
1,650
(D ) Skirts
Date
Received Issued Balance
Quantity Unit Cost
Amount Quantity Unit Cost
Amount
Quantity
Unit Cost
Amount
1-Sep
12
780
9,360
1-Sep 60
820
49,200
12
60
780
820
9,360 49,200
3-Sep
12
780
9,360
60
820
49,200
7-Sep
12
820
9,840 48
820
39,360
13-Sep
12
820
9,840
36
820
29,520
30-Sep
24
820
19,680
12
820
9,840
(E) Slipper
Date
Received Issued Balance
Quantity Unit Price
Amount Quantity Unit Price
Amount
Quantity Unit Price
Amount
1-Sep
48
900
43,200
48
900
43,200
5-Sep
12
900
10,800
36
900
32,400
7-Sep
12
900
10,800
24
900
21,600
20-Sep
24
900
21,600
27-Sep12
980
11,760
12 980
11,760
Trading, Profit and Loss and Appropriation Account
Blanna’s Fashion BoutiqueTrading Profit & Loss Account for the year ended September 30, 2011
$ $ $
Sales 457,590
Less Return Inwards (26,400)
Net Sales 431,190 Less Cost of Goods Sold:
Opening Stock 24,960
Purchases 95,000
Less Return Outwards (13,600)
Net Purchases 281,400
Cost of Goods Available 306,360
Less Closing Stock (54,930) 251,430 Gross Profit 179,760 Add Revenues Discount Received 7,500
187,260
Less Expenses Wages 40,000 Rent 30,000 Electricity 4,500 Insurance 5,100 Rates 2,600 Depreciation 400 Discount Allowed
18,175 100,775
86,485Net Profit
Add interest on Drawings: Shadae 620
Less: 85,865Interest on capitalAnna kay 12,500Shadae 7500Ovasha 10,000 30,000Salary:Anna kay 12,000 42,000
43,865
Share of Profit:Anna kay 18,277.08Shadae 10966.25Ovasha 14,621.67 43,865
Balance Sheet
Blanna’s Fashion Boutique Balance Sheet as at September 30, 2011
Fixed Assets Cost Accumulated Depreciation NBV
Buildings 100000 100,000 Fixtures 65000 65,000 Machinery 48000 400 47,600 Furniture 3600 3,600 Motor Car 62840 62,840
400 279,040
Current AssetsStock 54,930 Debtors 126,400 Prepayment 1,000 Bank 239,000 Cash 123,075
544,405
Less Current LiabilitiesCreditors 141960Accruals 1,200 143160Working Capital 401,245
680,285
Financed by:
Capital 600,000
Net Profit 86,485 686,485
Less Drawings 6,200
680,285
Bank Reconciliation Statement
Updated Cash Book
Balance b/d239,000
Bank Charges 65
Credit Transfer 4200 Standing Order 15000
Balance c/d228,135
243200
243200
Bank Reconciliation Statement as at September 30, 2011
Balance as per Bank Statement 222,535Add Late Lodgments 45,000 267,535Less Unpresented Cheque 39,400Balance as per Cash Book 228,135
Accounting Ratios
Inventory Turnover Ratio- Cost of Goods sold
Average Inventory/2
=244,470
24960+61890/2
=5.62
Current Ratio- Current assets
Current Liabilities
=551365
143160
=3.85
Gross profit as a percentage of sales- Gross profit x 100
Sales
=179,760 x 100 457590
= 39.28%
For every sale of $100 the business earns $39.28 as gross profit.
Net profit Ratio- Net profit / Net sales x l00 =86,485 / 431,190 x 100
=20.06%
For every sale of $100 the business earns $20.06 as net profit.
Acid Test Ratio- Current Assets- Stock
Current liabilities
= 544,405 - 54,930
143160
=3.42
Performance of the Business
In preparing the financial statements of Blanna’s Fashion Boutique the
Trading, profit and loss and appropriation account shows a profit of eighty six
thousand four hundred and eighty five thousand dollar (86,485) at the end of the
financial period of September 30,2011.
The business started out with six hundred thousand dollar. In the closing of
the financial period of Blanna’s Fashion Boutique there was an increase in the
amount of capital that the business has.
The business made a gross profit of one hundred and seventy nine seven
hundred and sixty dollars (179,760) instead of making a gross loss.
Comparisons
The comparison is being done between the opening capital and the
closing capital for Blanna’s Fashion Boutique, at the end of the financial period. At
the beginning of the financial year the opening capital was six hundred thousand
dollar (600,000). At the end of the financial period the closing capital is six
hundred and eighty thousand two hundred and eighty five dollar (680,285) which
means there is an increase of eighty thousand two hundred and eighty five dollar
(80,285).
Another comparison is being done between the fixed assets of the
business and the current assets. The fixed asset of the business is two hundred and
seventy nine thousand and forty dollar (279,040) while the current asset is five
hundred and forty four thousand four hundred and five dollars (544,405). This
means that the amount of money that the business spend of items that stays in the
business with no intention of selling it is lesser than the amount of money that the
business spend on assets that will allow the business to generate a profit.
Recommendations and Suggestions
It is recommended that Blanna’s Fashion Boutique:
Ploughed back a portion of the profit that the business makes into it. Introduces new products to the business. Purchase new equipment for the business Uses some of the profit that the business makes to attach another department
on to the business.
It is suggested that Blanna’s Fashion Boutique should:
Purchase cheaper equipments to use in the business. This will increase the amount of money available in the business.
Offer more sale discounts this will force more customers to purchase from Blanna’s Fashion Boutique.
Conclusion
It is clear that Blanna’s Fashion Boutique keeps all the records of the transactions that take place in the business over the financial period of time. Blanna’s Fashion Boutique could increase the gross profit and net profit of the business by adhering to the suggestions or recommendations outlined.
Never the less Blanna’s Fashion Boutique made a good net profit of eighty six thousand four hundred and eighty five dollars (86,485) during the month of September in 2011. Blanna’s Fashion Boutique was able to make a profit due to the large amount of sales the business made.
Price list
Goods PricePants $
Blouse $
Handbags $
Skirts $
Slippers $
INVOICE
Blanna’s Fashion Boutique
Invoice
No. 001
Date:
From: To:
Quantity Description Unit price $
Debit note
Blanna’s Fashion Boutique
Invoice
No. 001
Date:
From: To:
Quantity Description Unit price $
Principles of Accounts
School Based Assessment (2012-2013)
You are required to name the firm and state the nature of the business. This must be in accordance with the items sold*.
After the initial accounting entries (Tasks 1 -3) have been completed you will then record the additional adjusting entries as set out at Tasks 4 and 5.
You may choose goods from the following list for the transactions.
* Computer Store
Clothes and Accessories Store
A Keyboard Pants (guess)
B Mouse Blouse (guess)
C Printer Hand bags (guess)
D Surge Protector Skirts (guess)
E Speakers Slippers (guess)
ABC Enterprise
(Remember that you are to rename the firm)
The following transactions were taken from the books of ABC Enterprise. You are required to asses them carefully then write up the relevant books as outlined in the requirements below:
2011
Sept 1 Opening Balances
Capital $600, 000
Bank $364, 000
Cash $ 27, 160
Debtor (J Simpson) $ 31, 600
Creditor (Super Supreme International) $ 10, 560
Motor Van $ 62, 840
Building $100, 000
Stock
1doz A $ 10,800
1doz B $ 4,800
1doz D $ 9,360
Sept 1 Bought goods on credit from Super Supreme International.
8 doz A @ $1,000 each
8 doz B @ $440 each
4 boxes C @ $1,600 each
5 doz D @ $820 each
4 doz E @ $900 each
Sept 1 Bought Machinery by cheque $48, 000.
Sept 2 Withdrew $50, 000 cash from the bank account to be used in the business.
Sept 3 Cash Sales
2 doz A @ $1, 650 each
1 box C @ $2, 950 each
1 doz D @ $1, 400 each
Sept 3 Paid rent by cheque $30, 000.
Sept 5 sold goods on credit to J. Simpson.
1 doz A @ $1, 650 each
2 doz B @ $800 each
1 doz E @ $1, 500 each
Sept 6 Bought fixtures with cash $65, 000.
Sept 7 Cash Sales
1 box C @ $2, 950 each
1 doz D @ $1, 400 each
1 doz E @ $1, 500 each
Sept 8 Paid wages $10, 000 by cheque.
Sept 9 Returned goods to Super Supreme International as items were damaged.
1 doz A
1 box C
Sept 11 Paid the following expenses by cheque: Insurance $6,100,
Electricity $3,300 and Rates $2,600.
Sept 13 Sold goods on credit to B. Banton:
2 doz A @ $1, 650 each
2 doz B @ $ 800 each
1 box C @ $2, 950 each
1 doz D @ $1, 400 each
Sept 15 Made payment to Super Supreme International by cash $150, 000, received a 5% cash discount.
Sept 15 Paid wages with cash $10, 000
Sept 16 Owner withdrew $6,200 cash to fix his personal motor car.
Sept 18 Collected Cheque from J. Simpson for goods sold on Sept 5th 2011,
$45, 000.
Sept 19 Bought furniture $3,600 with cash from Courts Ja. Ltd.
Sept 20 Sold goods on credit to N. Kidman
2 doz A @ $1, 650 each
3 doz B @ $ 800 each
2 doz E @ $1, 500 each
Sept 22 Paid wages with cheque $10, 000.
Sept 24 1 doz D returned to us by B. Banton as they were the wrong size.
Sept 27 Bought goods on credit from Super Supreme International.
3 doz A @ $ 1,100 each
4 boxes C @ $1, 650 each
1 doz E @ $ 980 each
Sept 29 B. Banton settled his account less 10% cash discount. He paid
with cash.
Sept 29 Paid wages $10,000 by cheque.
Sept 30 Received goods from N. Kidman: 1 doz B
Sept 30 Cash Sales
3 doz A @ $1, 815 each
1 doz B @ $ 800 each
4 boxes C @ $3, 000 each
2 doz D @ $1, 400 each
Task 1
Write up ALL Subsidiary Books and then post the transactions to the ledgers. Please ensure that you distinguish between, General Ledger, Sales Ledger and Purchases Ledger. Show the opening entries in the General Journal at September 1, 2011.
Task 2
Prepare ABC Enterprise Trial Balance as at September 30, 2011
Task 3
Using the FIFO method of stock valuation, determine the closing stock.
Task 4
Design a logo and slogan for your business and provide the relevant information on the business entity
Prepare ABC Enterprise Trading, Profit and Loss Account for the month ending September 30, 2011 and a Balance Sheet as at that date, after taking into account the following:
a) Insurance expense was paid in advance, $1000.b) Electricity was outstanding by $1, 200c) Machinery is to be depreciated at 10 % annually using the straight line
method (show the depreciation for the month).
Show adjustment to the above information in the ledgers.
Task 5
Prepare the Bank Reconciliation Statement using the Bank Statement below
Bank Statement
DR CR Balance
$ $ $
Sept 1 Balance 364 000
Sept 1 Burke’s (Machinery) 48 000 316 000
Sept 2 SNPN Ltd (Cash) 50 000 266 000
Sept 8 Wages 10 000 256 000
Sept 11 NWC (Rates) 2 600 253 400
Sept 20 Wages 10 000 243 400
Sept 24 Credit transfer (Q Smith) 4 200 247 600
Sept 29 Wages 10 000 237 600
Sept 29 Standing Order 15 000 222 600
Sept 29 Bank Charges 65 222 535
Task 6
Prepare cheques, invoices, cash receipts, debit and credit notes (Appendices).
Task 7
Analyse the results of the operations of ABC Enterprise over the relevant period.
In your analysis you should highlight strengths/weaknesses and comment on ways in which the efficiency of the firm may be improved.
Accounting Ratios, graphs, tables, charts and diagrams are tools that when used will strengthen/enhance you analysis and presentation.
Comparisons may be made between the results of ABC Enterprise and those of the industry.
Task 8
Complete S.B.A. making reference to the due dates.
Due Dates:
Subsidiary Books - June 12th 2012
Trial Balance and Stock
Valuation - September 29th 2012
Trading, Profit and Loss and
Balance Sheet - September 29th2012
Bank Recon. Statement - October 16th2012
First Draft (completed) - November 17th2012
Final Draft (completed)- December12th 2012