principles of accounts school based assessment

Principles of Accounts School Based Assessment

NAME OF CANDIDATE: Martin Robinson

CANDIDATE No: 100136

CENTER No: 100136

TEACHERS’ NAME: Mrs. Newman

TERRITORY: Eltham High School

Year of Examination: 2016

ACKNOWLEDGEMENTFirst of all, I would like to thank god for being with me through it all. Secondly I would like

to thank my parent for providing me with the material I needed to complete my SBA and

for also encouraging me to put in the hard work. Thirdly I would like to thank my teacher

Mrs. Newman for her guidance throughout this SBA. Also, I would like to thank my friends

for their help sitting with me daily to ensure that my SBA is completed correctly.

INTRODUCTION - CARTERS’ CREAM

This SBA was done so that the researcher can accumulate skills in which he can apply in the

working-field. In addition this SBA was also done to store the researcher’s interest in

helping to find the right career path, for e.g. If the researcher wants to work for himself as a

sole proprietor owning his own business.

TABLE OF CONTENTAIMS…………………..…………………………………………………………………………………………….1

DESCRIPTION…………………………………………….……………………………………………………..2

TRANSACTION………………………………………………..…………………………………………………5

SOURCE DOCUMENT………………………………………………….………………………………….….8

BOOKS OF ORIGINAL ENTRIES………………………………….…………………………………….16

TRADING PROFIT AND LOSS…………………………………………….…………………………….25

BALANCE SHEET………………………………………………………………………………….……….…26

PERFORMANCE OF BUSINESS……………………………………………………………….…………27

INTERPRETATION OF RESULTS………………………………………………………………...…….28

FURTHER INTERPRETATION OF RESULTS………………………………………………………32

SUGGESTIONS/RECOMMENDATION………………………………………….……………………..34

CONCLUSION…………………………………………………………………………….…………….……….35

AIM OF PROJECT o The first aim of this project is to elevate my knowledge on how to manage the books

of original entries well.

o The second aim is to help me to easily understand the correct procedure of creating

source documents correctly.

The first aim of the business is to expand in terms of selling more ice-cream

to increase customer growth.

Another aim of the business is to improve on how to manage the

performance of the business.

Slogan

“di flavaz nice and di price just right”

1

DESPCRIPTION OF THE BUSINESS

The name of the business is Carter’s Cream. The area in which this business is located is

Hope Road, Kingston Jamaica. The business chose this location it is a well-known area for

selling ice-cream hence the large amount of people that goes there daily to purchase ice-

cream. The type of business entity is sole proprietorship. The business is trading in food

(ice-cream). This business began on the 23th of November 2014. The owner was inspired by

friends who are sole-proprietor about his business skills and his love for ice-cream. The

owner was also inspired by his leadership quality which helped him to know that he can be

the head of a business so he decided to create his own business. A capital of 400,000.00

was invested. There has been no problem encountered in the operation. The number of

employees are six(6):- owner(1), manager(1),cashier(1),servers(2)ice-cream makers(2).

The accounting procedures which are utilized are: Balance sheet, Journals and ledger.

MISSION STATEMENT

The mission of this business is to always ensure that the customers are always satisfied

with the products and to be creative with our ice-creams in different flavor.

2

ORGANISATIONAL CHART

TRANSACTIONS3

Owner

Cashier Ice-cream makers Servers

Manager

THE FOLLOWING TRANSACTIONS TOOK PLACE DURING THE MONTH OF FEBRUARY 2016.Feb 1 Bought goods on credit form E. Prince, list price $90,000 subject to 10% trade discount.

Feb 1 Sold the following on credit:

A. Warren $98,000B. Braithewaite $175,000C. Mann $165,000

Feb 2 Paid electrical bills by cheque $5, 400

Paid gas bill by cheque $6,800

Feb 3 Withdrew $20,000 from the bank for business use

Feb 4 Bought goods on credit from D. Campbell $45,000

Bought machinery on credit from Jamaican Cream Company $75,000

Feb 5 Sold to the following on credit:

A. Warren $82,000B. Braithewaite $20,000

Receive the amount owing from C. Mann in cash, they were given a 10% Cash Discount

Feb 5 Paid wages in cash $3,800

Feb 6 B paid us amount owed by cheque: they were allowed a 5% cash discount

Paid D. Campbell the amount owed to them Feb 1, by cheque we were given a 10% cash discount.

Paid for repairs to deep freeze by cash $4,800

Feb 7 Paid cleaning expense in cash $2,500

Feb 9 Paid cash into bank $8,300

Feb 10 received a cheque from A. Warren $30,000

4

Feb 12 Bought goods on credit from E. Prince list price $90,000, we were given a 10% trade discount


Feb 14 Sold gods on credit to B. Braithwaite $84,000

Feb 15 B returned goods to us valued at $5,400

Feb 18 Paid cleaning expenses in cash $1,000

Feb 19 Paid cleaning expenses in cash $1,000

Sold good on credit to A. Mann $42,000

Bought goods on credit from D. Campbell $20,000

Feb 20 A. Warren returned goods to us valued at $6,200

Paid wages in cash $3,800

Feb 24 Bought goods on credit from Jamaica Cream Company. $10,000

Paid carriage on goods purchased $1,500 in cash


Feb 28 Sold goods on credit:

C. Mann $22,500

B. Braithwaite $30,000

Feb 28 Received the amount owed from C. Mann by cheque, after allowing them 5% cash discount

Feb 28 Paid repairs to deep freeze $4,000

Paid salary by cheque $22,000

5

STOCK VALUATION

Opening Balance @ $80Purchases SalesFeb 1 1500@ $60 Feb 2 400@Feb 4 1000@ $70 Feb 5 900@Feb 12 500@ $80 Feb 14 1600@Feb 24 300@ $80 Feb 19 442@

YEAR PROFITS2012 120 0002013 200 0002014 250 0002015 300 000

2016 350 000

ACCOUNTSBALANCES

Land and Buildings

800 000

Machinery 200 000Deep Freezers* 25 000Equipment 50 000Motor Vehicle 400 000Stock 80 000Debtors:

A. Warren 80 000B. Braithwaite 75 000Creditors:D. Campbell 67 000E. Prince 56 450Bank Loan 100 000Bank 560 000Cash 160 000

6

7

SOURCE DOCUMEN

TS

SOURCE DOCUMENTS

BANKING DOCUMENTS

Withdrawal SlipName D. Robinson

WITHDRAWAL AMOUNT

Account# 816921 $ 20 000_______________

Date Feb 3, 2015_______________________SIGN HERE TO WITHDRAW MONEY

CASH RECEIPT

8

Cash Reciept No. 111876 Date:Date: Feb 5, 2015

Cash Received from C. Mann of $56 750 For 28 Units of Vanilla Ice Cream (8 250 cash discount)

Amount Due $56 750

Amount Received $ 56 750

Balance Due $0

Cash Received in:

CashCheque J . Carter Other Signed By

Carters' CreamHope Rd, KingstonKingston, J amaica

9

PURCHASES INVOICE

D. Campbell

19 Hagley Park Rd

Kingston, Jamaica

Feb 4, 2015

Invoice 21

To: Carter's CreamPer Unit $ Total $

Vanilla Ice Cream 4 10 000

Chocolate Ice Cream 8 15 000

Cherry Flavoured Cream 12 20 000

45 000

10

SALES INVOICECarter's Cream

16 Hope Rd

Half Way Tree

Feb 5, 2015Invoice 10

To: A. Warren

Kings Ave

Kingston, Jamaica

Per Unit Total

$ $Oreo Cool Mint Chocolate Ice Cream 8 22 000

Cookie & Cream Ice Cream 32 60 000

82 000

CREDIT NOTECarters' Cream

11

Hope RdKingston, Jamaica

Feb 14, 2015Credit Note 16

From: E. Prince

Per Unit Total

$ $Rum n Raisen Ice Cream 5 9 000

9 000

12

DEBIT NOTEB. BraithwaiteEastwood Park RdKingston, Jamaica

Feb 20, 2015

Debit Note 06

To: J. Carter

Per Unit Total

$ $

Male Long sleeve Shirt 2 6 200

6 200

13

PETTYCASH VOUCHER

Voucher# 81697Date: Feb 24, 2015

ITEMAMOUNT

12 units of Pistachio Ice Cream $ 1 500

TOTAL $ 1 500

Claimed By: Jamaican Cream Company Authorized By: J. Carter

14

OKS

OF ORIGNIAL ENTR

15

OKS

OF ORIGNIAL ENTR

BOOKS OF ORIGINAL ENTRIESPurchase Journal

2014Date Details Invoice# Folio $Feb 1 E. Prince 1 PL 17 000Feb 4 D. Campbell 21 PL 45 000Feb 12 E. Prince 2 PL 90 000Feb 19 D. Campbell 3 PL 20 000Feb 24 Jamaican Cream Company 4 PL 10 000 Feb Transferred to Purchase a/c 182 000

Return Inwards JournalDate Details DebitNote Folio $Feb 15 B. Braithewaite 5 PL 5 400Feb 20 A. Warren 6 PL 6 200

Transferred to Return Inward a/c GL 11 600

Sales JournalDate Details Invoice# Folio $Feb 1 A. Warren 7 SL 98 000Feb 1 B. Braithewaite 8 SL 175 000Feb 1 C. Mann 9 SL 165 000Feb 5 A. Warren 10 SL 82 000Feb 5 B. Braithewaite 11 SL 20 000Feb 14 B. Braithewaite 12 SL 84 000Feb 19 A. Warren 13 SL 42 000Feb 29 C. Mann 14 SL 22 000Feb 29 B. Braithewaite 15 SL 30 000

Transferred to Sales Journal a/c GL 718 500

Return Outwards Journal Date Details CreditNote Folio $

Feb 14 E. Prince 16 SL 9 000Transferred to Return Outward a/c 9 000

16

OKS

OF ORIGNIAL ENTR

PETTYCASH BOOKPetty Cash Book

Receipts Folio Details Voucher# Total Wages Repair Cleaning Expenses

Goods Purchased

$ 201480 000 b/d Feb 1 Float

Feb 5 Wages 3 800 3 800Feb 6 Repair Deep

Freeze4 800 4 800

Feb 7 Cleaning Expense

2 500 2 500

Feb 13 Wages 3 800 3 800Feb 18 Goods Purchased 500 500Feb 19 Cleaning

Expense1 000 1 000

Feb 20 Wages 3 800 3 800Feb 24 Goods Purchased 1 500 1 500Feb 27 Wages 3 800 3 800Feb 31 Repair Deep

Freeze4 000 4 000

29 500 15 200 8 800 3 500 2 000c/d Feb 31 Balance 50 500

80 000 80 00050 500 b/d Mar 1 Balance29 500 CB Mar 1 Cash

SALES LEDGERSALES LEDGER

A. Warren A/CDate

DetailsFolio

$Date

DetailsFolio

$

Feb 1 Balance b/d 80 000 Feb10

Bank CB 30 000

Feb 1 Sales SJ 98 000 Feb20

Returns Inward RIJ 6 200


Balance c/d 265 800

Feb19

Sales SJ 42 000

302 000 302 000Mar 1 Balance b/d 265 800

17

B. Braithewaite A/CDate

DetailsFolio

$Date

DetailsFolio

$

Feb 1 Balance b/d 75 000 Feb 6 Bank CB 237 500Feb 1 Sales SJ 175 000 Feb 6 Discount allowed CB 12 500


Returns Inward RIJ 5 400

Feb29

Sales SJ 30 000 Feb28

Bank CB 42 370

Feb28

Discount allowed CB __2 230

300 000 300 000C. Mann A/C

Date

DetailsFolio

$Date

DetailsFolio

$

Feb 1 Sales SJ 165 000 Feb 5 Cash CB 148 500

Feb14

Sales SJ 84 000 Feb 5 Discount allowed CB 16 500

Feb28

Sales SJ _22 500 Feb28

Balance c/d 106 500

271 500 271 500Mar 1 Balance b/d 106 500

18

PURCHASES LEDGERPURCHASES LEDGER

D. Campbell A/C

Date

Details Folio $Date

Details Folio $

Feb 6 Bank CB 100 800 Feb 1 Balance b/d 67 000

Feb 6 Discount Received CB 11 200 Feb 4 Purchases PJ 45 000

Feb28

Balance c/d _20 000 Feb19

Purchases PJ _20 000

132 000 132 000

Mar 1 Balance b/d 20 000

E. Prince A/CDate

Details Folio $Date

Details Folio $

Feb14

Returns Outward ROJ 100 000 Feb 1 Balance b/d 56 450

Feb28

Balance c/d 118 450 Feb 1 Purchases PJ 81 000

_______ Feb12

Purchases PJ _81 000

218 450 218 450


Jamaican Cream CompanyDate

Details Folio $Date

Details Folio $

Feb28

Balance c/d 75 000 Feb 4 Machinery GL 75 000

75 000 75 000


Confectionery and SuppliesDate

Details Folio $Date

Details Folio $

Feb28

Balance c/d 10 000 Feb24

Purchases PJ 10 000

10 000 10 000Mar 1 Balance b/d 10 000

19

GENERAL LEDGERSales

Date Details Folio $ Date Details Folio $

Feb28

Trading A/C 718 500 Feb28

Credit Sale SJ 718 500

PurchasesDate Details Folio $ Date Details Folio $

Feb28

Credit Purchases PJ 224 000 Feb28

Trading A/C 224 000

Returns In.Date Details Folio $ Date Details Folio $

Feb28

Total Credit RIJ 11 600 Feb28

Trading A/C 11 600

Returns Out.Date Details Folio $ Date Details Folio $

Feb28

To Profit & loss 9 000 Feb28

Total Credit ROJ 9 000

Electrical BillsDate Details Folio $ Date Details Folio $

Feb 2 Bank CB 5 400 Feb28

To Profit & loss 5 400

Gas BillDate Details Folio $ Date Details Folio $

Feb 2 Bank CB 6 800 Feb28


RepairsDate Details Folio $ Date Details Folio $

Feb 6 Petty Cash Book PCB 4 800 Feb28


Feb28

Petty Cash Book PCB 4 000

8 800 8 800

20

Cleaning ExpensesDate Details Folio $ Date Details Folio $



Feb19


3 500 3 500

WagesDate Details Folio $ Date Details Folio $



Feb13


Feb20


Feb27


15 200 15 200

21

CASHBOOKCASHBOOK

Date Details Folio Discount Allowed Cash $ Bank Date Details Folio Discount Received1-Feb Balance 160 000 560 000 Feb 1 Petty Cash Book PCB3-Feb Bank C 20 000 Feb 2 electrical Bills Gl5-Feb C. Mann 8 250 56 750 Feb 2 Gas Bill Gl6-Feb D. Campbell 8 750 166 250 Feb 3 Cash C9-Feb Cash C 8 300 Feb 6 E. Prince Pl 6 700

10-Feb A. Warren 30 000 Feb 9 Bank C

28-Feb C. Mann 1,125________ 21, 375 Feb 17 Salary Gl

Feb 28 Salary GlFeb 28 Balance c/d

18 125 336 750 785 925 6 7001-Mar Balance b/d 649 425 248 450

22

TRIAL BALANCE

Date

Carter’s CreamTrial balance as at Dec. 31 2015. Details Debit$ Credit$Land and Building 510,165Machinery 200,000Deep Freezers 75,000Motor Vehicles 400,000Fixtures 75,000Equipment 90,000Repairs 8,800Electrical Bill 5,400Gas 6,800Bank Loan 100,000Wages 15,200Salaries 44,000Cleaning Expense 3,500

Capital1,996,55

0Discount Allowed 18,125Discount Received 16,865Stock 80,000Carriage Inward 2,000Return Outwards 9,000Return Inwards 11,600Purchases 224,000Sales 718,500Cash 248,450Bank 649,425Petty Cash 50,500Debtors: A 265,800C 203,600Creditors:Courts Supplies 75,000E 196,450D 65,000

10,000Confectionery and Supplies

3,187,365

3,187,365

23

FIFOFIFO

DATERECIEPTS ISSUES BALANCE

QUALITY PRICE VALUE QUALITY PRICE VALUE QUALITY PRICE VALUEFeb 1 1000 80 80 000Feb 1 1500 60 90 000 1000 80 80 000

1500 60 90 000Feb 2 170 000

400 80 32 000 600 80 48 0001500 60 90 000

Feb 4 138 0001000 70 70 000 600 80 48 000

1500 60 90 0001000 70 70 000

Feb 5 208 000600 80 48 000 0 80 0300 60 18000 1200 60 72 000

1000 70 70 000

Feb12 142 000

500 80 40 000 1200 60 72 0001000 70 70 000

500 80 40 000

Feb14 182 000

400 70 28 000 600 70 42 000500 80 40 000

Feb19 82 000

442 70 30 940 158 70 11 060500 80 40 000

Feb24 51 060

300 80 24 000 158 70 11 060500 80 40 000300 80 24 000

75 060

24

PROFIT & LOSS ACCOUNTCarters’ Cream

TRADING PROFIT & LOSS ACCOUNT FOR THE MONTH ENDED FEB 28, 2015.

$ $ $SALES 718 500LESS RETURNSINWARDS 11 600NET SALES 706 900LESS COST OF GOODS SOLD:OPENING STOCK 80 000PURCHASES 224 000CARRIAGE INWARDS 2 000

226 000LESS RETURNSOUTWARDS 9 000NET PURCHASES 21 7000GOODS AVAILABLE FOR RESALE 297 000LESS CLOSING STOCK 75 060COST OF GOOD SOLD 221 940GROSS PROFIT 484 960REVENUES:DISCOUNT RECEIVED 16 865

501 825EXPENSES:REPAIRS 8 800ELECTRICAL BILLS 5 400GAS 6 800WAGES 15 200SALARIES 44 000DISCOUNT ALLOWED 18 125CLEANING EXPENSE 3 500

101 825NET PROFIT 400 000

26

BALANCE SHEETCarter’s Cream

BALANCE SHEET AS AT FEB 28, 2015$ $ $

ASSETSFIXED ASSETSLAND & BUILDING 510 165FIXTURES 75 000EQUIPMENT 90 000MACHINERY 200 000DEEP FREEZERS 75 000MOTOR VECHICLES 400 000

1350 165CURRENT ASSETSCLOSING STOCK 75 060DEBTOR : A 265 800C 203 600BANK 649 425PETTY CASH 50 500CASH 248 450

1 492 835LESS CURRENT LIABILITIESCREDITOR : COURT SUPPLIES 75 000E 196 450D 65 000CONFECTIONERY & SUPPLIES 10 000WORKING CAPITAL 1 146 385

2 496 550LESS LONGTERM LIABILITIESBANK LOAN 100 000

2 396 550FINANCED BY:CAPITAL 1 996 550NET PROFIT 400 000

2 396 550LESS DRAWINGS 0

2 396 550

27

PERFORMANCE OF BUSINESS

120 000 200 000 250 000 300 000 350 000 400 0002008

2009

2010

2011

2012

2013

2014

2015

2016

2017Profit For Each Year

The above bar graph shows the performance of the business showing the financial

elevation of Carters’ Cream each year since 2011. The graph above shows the increase in

profit from 2011 to 2012 then having a colossal increase of $300,000.00 in 2015. Contrary

to the other years the business made an immense escalation in 2016 of $400,000.00. The

following information will elucidate the bar chart above.

In 2011 when the business commenced in a prominent location known for selling the best

ice-cream Carters’ Cream made a small profit with a slight increase up to 2012. Carters’

Cream began to create nutritious and attractive flavors unlike any other ice-cream business

which caused the business to obtain customers from other businesses precipitating an

increase in profit of $300,000.00 in 2014. After looking at the profitability of the business

since 2011 Carters’ Cream began to deliver ice-cream leading to more customers causing a

tremendous increase of $400,000.00 in 2016.

28

Net Profit=Net Sales

400,000= %57706,900

For every $100 of sales Carters’ Cream earns $57 in net profit.

Carters’ Cream makes a profit of $57 out of $100 therefore this is good for the business

because we are selling more than we purchase.

29

INTERPRETATION OF RESULTSCURRENT RATIO

Feb 28, 2016

Current Assets=

Current Liabilities1,492,835=346, 450=4:1For every $1 in current liabilities Carters’ Cream has $4 to cover debts.

Jan 31, 2016750,000=223, 450 =3:1For every $1 in current Liabilities Carters’ Cream has $3 in current assets to cover debts.

Jan 31, 2016 Feb 28, 20160

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Current Ratio

In comparison to Jan 1, 2016 Carters’ Cream is more liquid Feb 28, 2016 to cover debts

because the business improved in the amount of goods sold therefore becoming more

profitable in February.30

ACID TEST/ QUICK RATIO

Jan 31, 2016Feb 28, 2016

00.5

11.5

22.5

33.5

4

Acid Test/Quick Ratio

Jan 31, 2016Current Asset – Stock=Current Liabilities750 000 – 80 000= 223 450=3:1For every $1 in current liabilities Carters’ Cream has $3 to cover debts.

Feb 28, 2016Current Asset - Stock=Current Liabilities1 492 835 - 80 000=346 450=4:1For every $1 in current Liabilities Carters’ Cream has $4 to cover debts.

The comparison above is so, because Carters’ Cream made more profit from selling different flavours of ice cream in February than Jamaica.

31

FURTHER INTERPRETATION OF RESULTS

February Start February End0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

SalesPurchases

SALES

In comparison Carters’ Cream was more profitable at the end of February than at the start

of the month because the business had fewer customers hence we sold fewer goods and

also had less stock in the previous month.

PURCHASES

The reason for the increase profitability is because the product which the business create

have been declared as being the most sumptuous ice-cream to our loyal customers who

keep coming back to purchase more than their usual amount and most of the times with

friends who also bought Carters’ Cream in the month of February which led to an

accumulation of profit for the month in purchases.

32

Feb 1, 2016Net Profit=Net Sales400,000=525, 000=76%For every $100 of sales Carters’ Cream earns $76 in net profit.

Feb 28, 2016Net Profit=Net Sales400, 000=718, 000=56%For every $100 of sales Carters’ Cream earns $56 in net profit.

33

SUGGESTIONS/ RECOMMENDATIONS

In maximizing profitability Carters’ Cream intends to have business in more than one

location.

In expansion Carters’ Cream could become an international business selling ice-cream to

people worldwide. Carters’ Cream could advertise its ice cream on television and other

advertising media.

The business could employ more people, trust worthy and loyal people to make the overall

managerial staff better by building a family-like relationship together making ice cream

happily.

34

CONCLUSIONIn conclusion Carters’ Cream has managed to successfully accomplish our financial aims. I

have learnt how to manage the books of original entries well by even developing a good

relationship with the employees. I now understand how to create source documents in the

correct manner.

Also we have accomplished our business aims, increasing in profitability having a

huge growth in the business. As said previously Carters’ Cream also had an

enormous growth in customers because of having different flavors unlike other ice-

cream business. The profitability of Carters’ Cream has earned enough money for an

expansion in other locations. As long as Carters’ Cream has its dedicated customers

and employees we will continue to achieve our goals and aims always creating ideal

ice-cream for our valued customers.

35

principles of accounts school based assessment

Business