accouunts sba completed 2

8/2/2019 Accouunts Sba Completed 2

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1

Aims of project.Page 2

Data Sheet......Page 3

Description of Business .Page 4

Transactions...Page 5

Source Documents:Purchases invoice...Page 6

Sales invoice...Page 8

Credit notePage 10

ChequePage 11

Receipt......Page 12

Books of original entry:

General Journal.... Page 13

Sales Journal Page 14

Purchases Journal Page 15

Returns inwards Journal..Page 16

Cash Book..Page 17

Ledgers:

Sales Ledger Page 18

Purchases Ledger Page 19

General Ledger .Page 20

Trial BalancePage 22

Final Accounts:

Trading and Profit and Loss AccountPage 23

Balance SheetPage 24Statement of PerformancePage 25

Further Analysis and Interpretation of Financial Statements

Ratios:

Profitability RatiosPage 26

Liquidity Ratios.Page 27

Efficiency RatiosPage 28

ComparisonsPage 31

ConclusionPage 32

RecommendationsPage 33

Appendices:

PicturesPage 34

Organizational Charts..Page 35


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2

This project aim is:

1. To formulate the source documents, journals and ledger accounts essential for the recording of transactions for

November 2016.


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3

Name of Business: La Dimples Fashion Line

Short History Of Business: (see description of business)

Location: Lower Park Range Avenue, Port Zante

Reason for location: (see description of business)

Ownership of business: Partnership

Size of staff: seventeen (see description of business for more details)

Type of business: Retailer

Business activities sold: clothes, shoes, accessories (see description of business for more details)

Period of review: one month

Frequency of reporting: monthly

Documents used: sales invoice, purchases invoice, cash receipt, cheque, credit note and debit note

Journals and accounting records used: General journal, sales journal return inwards journal and returnoutwards journal, three column cash book.

Liquidity ratios used

Current ratioAcid test ratio

Efficiency ratios

Rate of stock turnoverDebtors collection period (debtors to sales ratio)Creditors payment (Creditors to purchases ratio)


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4

La Dimples Fashion Line is yet to be the clothing store of the century. Bringing you all of the state-of-

the-art designs that can also be personalized such as miniskirts, halter tops, tank tops and all denims, shoes and

both fashion and real accessories.

This business focuses mainly on teens and pre-teens ages 12-19. This is because they have money to

spend freely acquired from savings, allowances, etc. and the items they buy are largely luxury. Also they

make many, if not most, of their purchasing decisions independently and they have significant influence on

family purchases.

La Dimples Fashion Store opens just the right time from 8-4 and is located at just the right place which

is Lower Park Range Avenue, north east of Port Zante and left of Shoppers Complex, upstairs the old police

building. This sole trader business, owned by Shanika Joshua runs on a staff of 9. The owner, who is also the

designer and accountant of the business, one manager, four seamstresses and tailors, two cashiers and two

cleaners. The business will successfully start with $50,000.00 capital which was acquired from the owners

savings and a loan from the development bank.


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5

Transactions for the month of November, 2011.

Date Transactions

Nov 1 Started business with $25000 in bank and $25000 cash

Nov 3 Bought stock from Jim Jones Trading Ltd. $16000 on credit

Nov 5 Bought vehicle from T.D.C $20000 on credit

Nov 8 Bought clothing racks from Mabel Supplies $16000 on credit

Nov 9 Sold personalized T-shirts to J. Hankins on credit $1000

Nov 10 Took $200 out of the bank and put into cash till

Nov 11 Sold $6000 goods on credit to K. James

Nov 12 Received Cheque from J. Hankinsn$1000

Nov 14 Sold miniskirts in bulk to Il et Elle Kids Fashion on credit $1200

Nov 15 Bought $700 goods on credit from Silver Lee Caines

Nov 18 Il et Elle Kids Fashion returned goods to us $400

Nov 22 Paid electricity by cash $1800

Nov 23 Sold goods on credit to P. Johnson

Nov 29 Paid salaries by cash $15500


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6

Fort Street, Basseterre, St. Kitts

(869) 465- 8998

[email protected]

Date:- 05/ 11/ 11

Invoice:- 9871

Description Amount

Ford Focus (vehicle) $20000.00

$20000.00

$0.00

$20000.00

Subtotal

Total

Tax

Thank you for your business

La Dimples Fashion Line

Lower Park Range avenue,

Basseterre,

St. Kitts

Phone:- 869-465-1988


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INVOICE

MabelDATE: 8 November, 2011

supplying your every electronic need INVOICE # 100

Canyon Street

Basseterre BILL TO: Shanika Joshua


Lower Park Range Avenue

Basseterre

DESCRIPTION AMOUNT

Clothing racks

$

16,000.00

SUBTOTAL

$

16,000.00

vat 0

0

-

TOTAL

$

16,000.00

Make all checks payable to MabelTHANK YOU FOR YOUR BUSINESS!


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Make all checks payable to LE NYLON LTD.

THANK YOU FOR YOUR BUSINESS!

La Dimples Fashion Li

Lower Park Range Avenue, Basseterre, St. Ki

Phone: 869-465-19

www.Fashion 4evry1.co

INVOICE: 0001

Quantity Description Unit Price Total

8

15

8

Blue personalised t- shirts for boys with company

logo(small)

Multicoloured Personalised T- shirts with company

logo(smll)

Pink peronalised T-shirts for girls with companylogo(medium)

$ 25.00

$ 40.00

$ 25.00

$ 200.00

$ 600.00

$ 200.00

` $ 1000.00

5/11/2016

Please make all cheques payable to La Dimples Fashion Line

Thank you for your business!

To: J. Hankins,

Stylish Kids Fashion Store,

Cayon St, Basseterre, St. Kitts

Invoice 0001


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La Dimples Fashion Li

Lower Park Range Avenue, Basseterre, St. Ki

Phone: 869-465-19www.Fashion 4evry1.co

INVOICE: 0001

Quantity Description Unit Price Total

8

15

8

Blue personalised t- shirts for boys with company

logo(small)

Multicoloured Personalised T- shirts with company

logo(smll)

Pink peronalised T-shirts for girls with company

logo(medium)

$ 25.00

$ 40.00

$ 25.00

$ 200.00

$ 600.00

$ 200.00

` $ 1000.00

5/11/2016



To: J. Hankins,

Stylish Kids Fashion Store,

Cayon St, Basseterre, St. Kitts

Invoice 0001


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Il et Elle Kids Fashion,

Princes Street,

Basseterre, St. Kitts

Credit against

Order no. 8748

Invoice no. 0002



credit note


Lower Park Range Avenue

Basseterre, St. Kitts

Description Total

Miniskirts sizes 10-14

Charged 48 @ $25.00

Return inwards 16 @ $25.00

Price to be paid 32 @ $25. 00

$1200.00

$400.00

$800.00

Date: 10/11


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LA DIMPLES FASION LINE No.Lower Park Range Ave.

Basseterre, St. Kitts DATE______/________/_______

Tel: 869-466-1988

Pay to the

Order

of___________ _____________________________________ $

DOLLARS

St. Kitts, Nevis and AnguillaNATIONAL BANK LIMITED

Basseterre, St. Kitts, W. I

_________________________________09837:87263:


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Receipt

Date_____________________ No. ________

Amount $________________

Description

Charged to

Received by

Approved by


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GENERAL JOURNAL

DATE DETAILS FOLIO DEBIT CREDIT

NOV 1 BANK GL5 25000

NOV 1 CASH GL6 25000

NOV 1 CAPITAL GL7 50000

ASSETS AND LIABILITIES AT THIS DATE TO BE ENTERED IN TO OPEN

THE BOOK

NOV 5 VEHICLE GL8 20000

T.D.C 20000

BOUGHT VEHICLE ON CREDITNOV 8 CLOTHING RACKS GL9 1600

MABEL SUPPLIES 1600

BOUGHT CLOTHING RACKS ON CREDIT

36000 36000

Pg


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Sales journal

DATE DETAILS FOLIO INVOICE

NO

AMOUNT

NOV 9 J. HANKINS SL1 0000 1000

NOV 11 K. JAMES SL1 0001 6000

NOV 14 IL ET ELLE KIDS FASHION SL1 0002 1200

NOV 23 P. JOHNSON SL1 0003 600

NOV 30 TRANSFER TO SALES LEDGER GL 8800

Pg1


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Purchases journal

DATE DETAILS FOLIO INVOICE

NO

AMOUNT

NOV 3 JIM JONES PL1 746 16000

NOV 8 SILVER LEE CAINES PL1 876 700

NOV 30 TRANSFER TO PURCHASES LEDGER GL 16700

Pg1


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Return inwards journal

DATE DETAILS FOLIO DEBIT CREDIT

NOV 18 IL ET ELLE KIDS FASHION SL1 400

NOV 30 TRANSFER TO RETURN INWARDS A/C GL1 400

Pg1


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Cash book

Date Details Folio Disc.Allowed $

Cash $ Bank$

Date Details Folio R

Nov 1 Capital GL1 25000 25000 Nov 10 Cash c

Nov 10 Bank c 200 Nov 22 Electricity

Nov 12 J. Hankins SL1 1000 Nov 29 Salaries

Nov 30 Balance c/d

25200 26000

Dec 1 Balance b/d 7900 26000

P


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sales ledger

J. Hankins

Nov 9 sales SJ1 1000 Discount allowed 100

Nov 12 Bank 900

10001000

Il Et Elle Kids Fashion

Nov 18 return inwards 400

Nov 30 balance c/d 800

Nov 14 sales SJ1 1200

Dec 1 balance b/d 1200

12001200

Pg1

P. Johnson a/c

Nov 30 balance c/d 600Nov 23 sales SJ1 600


600600

K. James a/c

Nov 30 balance c/d 6000Nov 11 sales SJ1 6000


60006000


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Purchases ledger

Nov 3 purchases PJ1 16000



Jim Jones a/c

Nov 5 vehicle PJ1 20000



TDC a/c

Nov 8 clothing racks PJ1 16000



Mable supplies a/c

Pg

Nov 5 purchases PJ1 700



Silver Lee Caines a/c


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General ledger

Nov 1 bank 25000

Nov 1 cash 25000

50000

Nov 30 balance c/d GJ1 9000


Capital a/c

Nov 30 balance c/d 16000Nov 8 Mabel supplies GJ1 16000


Clothing racks a/c

Nov 30 balance c/d 20000Nov 5 TDC GJ1 20000


vehicle a/c

Nov 30 profit and loss a/c 1800Nov 22 cash CB1 1800


Electricity a/c


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Nov 30 profit and loss a/c 15500Nov 29 cash CB1 15500


Salaries a/c

Nov 30 total sales for the

month 2200Nov 30 trading a/c 2200

Sales a/c

Nov 30 trading a/c 16000

Nov 30 total sales for the

month 16000

Purchases a/c

Nov 30 trading a/c 400

Nov 30 total return inwards

for the month 400

Return inwards a/c

Pg2

Pg3


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Trial balance


Trial balance

As at November 30, 2011.

Description Debit Credit

Bank 25800

Cash 7900

Capital 50000

Vehicle 20000

Machinery 16000

Sales 8800

Purchases 16000

Debtors 7400

Creditors 52700Return inwards 400

Electricity 1800

Salaries 15500

111500 111500


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Trading and profit and loss account


Trading and profit and loss a/c

As at November 30 2016

Description $ $

Sales 8800

Return inwards 400

Net sales 8400

Cost of goods sold:

purchases 16700

Closing stock 600

Cost of goods sold 16100

Gross loss -7700Expenses:

Electricity 1800

Salaries 15500

Total expenses 17300

Net loss -25000


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Balance sheet


Balance sheet

As at November 30 2016

Details Debit CreditFixed assets

Vehicle 20000

20000

Current assets

Debtors 7400

Bank 25800

Cash 7900

Total current assets 41100

Current liabilities

Creditors 52700Working capital -11600

Net current assets 31600

Finance by:

Capital 50000

Net loss -25000

Capital at end 25000


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Liquidity Ratios:

(a) Current Ratio:

Total Current Assets = 41100 = 1:0.8

Total Current Liabilities 52700

La Dimples Fashion line is at a critical position to pay its debts as it hardly has enough assets available

to cover the business debts. That is, for every dollar that La Dimples Fashion line owes, it has less than

$1.00 available.

(b) Acid Test Ratio:

Total Current AssetsClosing Stock = 41100600 = 0.8:1Total Current Liabilities 52700

La Dimples Fashion line has insufficient liquid resources available to cover its debts even after closing

stock has been deducted from the business total current assets. Thus, for every dollar that La Dimples

Fashion line owes, it has $0.80 available.


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3. EfficiencyRatios:

(a) Stock turn-over:

Cost of goods sold = 16100___ = 26.4 times

Average Stock 600

La Dimples Fashion line replenished its stock over twenty times during the period which means that

business was rapid in this time.

(b) Debtors to Sales Ratio:

Average Debtors 30 = 700 30 = 25.2 = 10 days

Credit Sales X 1 2200 X 1

La Dimples Fashion line does not receive payments from its debtors as fast as it should, that is, every 25

days. This means that an unsteady flow of income is coming in to the business, which makes covering

the business expenses very difficult.

(c) Creditors to Purchases Ratio:

Average Creditors 30 = 37600 365 = 1152 days = 96 months

Credit Purchases X 1 1600 X 1

La Dimples Fashion line takes 96 months to pay its creditors, which is much longer than it takes for the

money to come into the business.


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La Dimples Fashion lines opening capital for the month was $50000.00. At the end of the period, a total

of $25 000 was used hence the capital ended as $25 000.

Opening vs. Closing Capital

Opening Capital

closing capital


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La Dimples Fashion lines Purchases for the month was $16700.00 and the total Sales was $8800.00.

Purchases vs.Sales

Purchases

Sales


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La Dimples Fashion Lines current assets amounted to $41100.00, while the liabilities amounted to

$52700.00.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Current assets

Current Liabilities

Current assets Current LiabilitiesSeries 1 $41,100.00 $52,700.00

Series 1


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At the end of the month La Dimples Fashion Line made an unfortunate loss of -$25 000.00. However,

although such a big loss was made, for a young and newly established business, it is not performing too poorly

and as the owner I am planning to implement new cost-saving strategies in order to make higher profits.


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After the completion of this School Based Assessment, these are my conclusions:

One mistake during the accounting process can throw ones business into various problems such as

using single entry (instead of the double entry system), which leads to incomplete records.

I was able to broaden my knowledge in Principles of Accounts and I will more efficiently use the skills

gained in a future career that deals with accounting.


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La Dimples Fashion line needs to ensure that creditors are paid on time and at the same time encourage

debtors of prompt payment in order to reduce the amount of money owed. They should ensure that the

amount of money going out of the business is not more that the money coming into the business. This

will aid in increasing profits as the business grows.


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OWNER(1)

MANAGER(1)

MARKETINGDEPT. (2)

ADVERTISINGDEPT. (1)

CASHIER(2)

CLEANERS(2)


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Mini skirts denims

shirts

accessories