cxc principles of accounts sba
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Candidate Name: School: Registration #:Centre #:Territory: JamaicaDate: February 12, 2013Teacher:
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This SBA is mainly about a project done at Green Pond High School BAS snack counter. The project tells the different varieties of product sold at the school and how the business was successfully run.
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The project could not be completed without the help of my friends and family. I indeed acknowledge my teacher Mr. Montaque for guiding and helping me with adequate information to complete it also.
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To record each transaction incurred for the business accurately, using Standard Accounting Procedures.
To use those accounting records to provide clear financial and accounting information on the performance of the business.
To use the accounting information to assess the performance of the business.
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The BAS Snack Corner is named after the three classes which are doing this SBA. The classes are called Business, Arts and Science (BAS).
The business was started on September of 2011 and is located at the Green Pond High School underneath the staircase on the lower block.
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Sales Invoice : used for recording sales made. It is given to the customer showing details of the goods sold and their prices.
Cheque : this is given to us by the buyer cost of covering goods purchased. Receipt : this is given to the customer showing that payment has been made
for good purchased. Petty Cash Voucher : this document gives details of how the petty cash was
spent including the amount. Lodgment Slip: used for making cash or cheque deposits to the bank
account. Sales Journal : used to record all goods sold on credit. Purchases Journal: used to record all credit purchases. Return Outwards Journal: used to record all credit purchases returned to
the supplier. Return Inwards Journal: used to record all credit sales returned to us. General Journal: used to record all other transactions which are not in the
other journals. Cash Book : records all receipts and payments made by cash or cheques.
Sales Ledger : used to record customers’ personal accounts. Purchases Ledger : used to record suppliers’ personal accounts. General Ledger : used for recording a complete collection of all the
accounts of the business.
Trading Profit and Loss Account : gives a report of whether the business has made a profit or loss for a period of time.
Balance Sheet : a financial statement that lists the assets, liabilities an owner’s equity of the business as at a specific period of time.
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The business made a sale of $102 for the first which was the lowest; however for the second week a grater sale was made of $2,655 which was the highest and in week three sales was at $1,110 which showed a decrease. Week four was $2,097 which showed a moderate increase over week three.
The purchases for the month of September we bought most of the goods valued at $4,405, which is the highest.
For the second and fourth week there were no purchasing of goods from the previous week and for the third week we bought a small quantity of goods valued at $1, 000.
A lot was paid on expense in the third week of September valued at $1,650 and the second week valued at $1,500. In the fourth week we spent $650 which was average and in the second week we did not spend any amount on expenses.
The business was successfully run for the rest of the period at Green Pond High School. The students benefited from the snack corner and the school because the supplies was sold at a reasonable price.
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Week 1 Week 2 Week 3 Week 40
500
1000
1500
2000
2500
3000
Sales for the Month
This is a graph showing the weekly sales for the month of September 2011
This is a graph showing the weekly sales made of $102 in week one, which was the lowest, because we had just started out and sales were slow. However, in week two we made $2,655 which was the highest and in week three sales was at $1,110 which showed a decrease. Week four was $2,097 which showed a moderate increase over week three.
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Week 1 week 2 Week 3 week 40
50010001500
200025003000
3500400045005000
Purchases for the Month
This is a graph showing purchases for the month of September 2011
This graph shows purchases for the month. It is showing that for the first week of September we bought most of the goods valued at $4,405, which is the highest.
For the second and fourth week there were no purchasing of goods from the previous week and for the third week we bought a small quantity of goods valued at $1, 000.
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week 1; 1500
week 3; 1650
week 4; 650
Expenses for the Month
This chart shows the expenses for the month of September 2012
This chart shows that we paid a lot on expense in the third week of September valued at $1,650 and the second week valued at $1,500. In the fourth week we spent $650 which was average and in the second week we did not spend any amount on expenses.
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Profitability Ratios
Gross profit as percentage of sales
Gross profitSales
×100
1=2462
5964×
1001
=41×per annum
A gross profit of $41 is obtained on every $100 of sales for the year, before any expenses were paid. The Sales mix could have contributed to this because of the difference in how much has been sold of each type of goods and in particular those that have a higher cost price. Also the selling price of the goods was not increased or adjusted to the same extent of the cost price of the goods.
Net profit percentage of sales
Net lossSales
×100
1=−1518
5964×
1001
=−1518005964
=−25×per annum
A net loss of $25 is suffered on every $100 of sales for the year. This is a reflection of the Gross Profit Percentage of sales ratio, with a lower percentage ratio, as it includes the expenses. This would be due to more expenses incurred for each $100 of sales.
Liquidity Ratios
Current ratio
Current assetCurrent liability
=4257721565
=2×per annum
There is $2 of current assets for every $1 of current liabilities. Therefore the assets can be turned into cash within the year to pay the current liabilities for the same period and therefore the business will be able to pay its creditors and expenses when they become due.
Acid test ratio
Quick assetCurrent liability
=4063321565
=1 time
This shows that the business has enough assets – (cash, bank, debtors paying up) that will overall, quickly convert into cash to pay its Creditors and expenses timely. Also the ratio figure reported is not strong and therefore the business needs to improve in order to show a better position in this ratio and strengthen its ability to pay its short term debts.
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The aims of the project were achieved as standard accounting procedures were used to properly record all the transactions for the business.
As a result of keeping proper bookkeeping records, financial statements were prepared showing clear and correct accounting information of the financial status of the business.
The accounting information provided was used to assess the performance of the business if it is making a loss and identifying areas for improvement. The information was also useful in providing suggestions and recommendation to improve the business.
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In order for the business to make a profit there should be:
An increase in sales prices. This would increase the sales figure so that we can make more profit.
Owner should restrict himself to less drawing until the business shows better improvement.
Should not purchase any additional fixed asset until the financial position of the business shows improvement.
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Source Documents
Original Entry
Double Entry
Profit and Loss
Account
Balance Sheet
Receipts, invoices, Cheque
Cash bookJournals
T-AccountsLedgers
Where the profit and loss of the business is calculated.
Financial statement
showing the liabilities, assets and capital at the end of a period.
Cheque
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Invoice
16
Receipts
17
Lodgment Slip
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2011 $Sept 1 Cash 100,000
CAPITAL
CASH
2011 $ 2011 $Sept 1 Capital 100000 Sept 2 Rent 1500Sept 7 Sales 102 Sept 2 Office Equipment 5000Sept 9 Sales 450 Sept 3 Purchases 870Sept 11 Sales 747 Sept3 Purchases 2285Sept 18 Sales 678 Sept 5 Bank 75000Sept 23 Sales 390Sept 24 Sales 771Sept 30 J. Doe 700 Sept 30 Balance c/d 19183
103838 103838Aug 1 Balance b/d 19183
RENT
2011 $ 2011 $Sept 2 Cash 1500 Sept 30 Balance c/d 1500Aug 1 Balance b/d 1500
COMPUTER
2011 $ 2011 $Sept 2 INC 50000 Sept 30 Balance c/d 50000Aug 1 Balance b/d 50000
INC
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2011 $ 2011 $Sept 30 Bank 50000 Sept 2 Computer 50000
OFFICE EQUIPMENT
2011 $ 2011 $Sept 2 Cash 5000 Sept 30 Balance c/d 5000Aug 1 Balance b/d 5000
PURCHASES
2011 $ 2011 $Sept 3 Cash 870Sept 3 Cash 2285Sept 6 Cash 1580Sept 19 Super Plus 1000 Sept 30 Balance c/d 5735
5735 5735Aug 1 Balance b/d 5735
DEEP FREEZE
2011 $ 2011 $Sept 5 Singer Ltd 20000 Sept 30 Balance c/d 20000Aug 1 Balance b/d 20000
SINGER LTD
2011 $ 2011 $Sept 30 Balance c/d 20000 Sept 5 Deep Freezer 20000
Aug 1 Balance b/d 20000
JOE’S WHOLESALE
2011 $ 2011 $Sept 16 Return Outward 15 Sept 6 Purchases 1580
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Sept 30 Balance c/d 1565 1580 1580
Aug 1 Balance b/d 1565
BANK
2011 $ 2011 $Sept 5 Cash 75000 Sept 20 Carriage 150Sept 8 Sales 510 Sept 21 Wages 1500Sept 14 Sales 786 Sept 25 Drawings 1500Sept 17 Deedo Brown 126 Sept 27 Motor Cycle 1300Sept 22 Sales 432 Sept 29 Super plus 850
Sept 30 Telephone 500Sept 30 Electricity 150Sep 30 INC 50000Sept 30 Balance c/d 20904
76854 76854Aug 1 Balance b/d 20904
SALES
2011 $Sept 7 Cash 102Sept 8 Bank 510Sept 9 Cash 450Sept 10 Deedo Brown 162Sept 11 Cash 747Sept 14 Bank 786Sept 18 Cash 678Sept 22 Bank 432Sept 23 Cash 390Sept 24 Cash 771
Sept 30 Balance c/d 5964 Sept 28 John Doe 936 5964 5964
Aug 1 Balance b/d 5964
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DEEDO BROWN
2011 $ 2011 $Sept 10 Sales 162 Sept 13 Return Inward 36
Sept 17 Bank 126 162 162
RETURN INWARD
2011 $ 2011 $Sept 13 Deedo Brown 36 Sept 30 Balance c/d 36Aug 1 Balance b/d 36
RETURN OUTWARD
2011 $ 2011 $Sept 30 Balance c/d 15 Sept 16 Joe’s Wholesale 15
Aug 1 Balance b/d 15
DRAWINGS
2011 $ 2011 $Sept 25 Bank 1500 Sept 30 Balance c/d 1500Aug 1 Balance b/d 1500
SUPER PLUS
2011 $ 2011 $Sept 29 Cheque 850 Sept 19 Purchases 1000Sept 30 Balance c/d 150
1000 1000Aug 1 Balance b/d 150
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CARRIAGE OUTWARD
2011 $ 2011 $Sept 30 Balance c/d 150 Sept 20 Bank 150
Aug 1 Balance b/d 150
WAGES
2011 $ 2011 $Sept 21 Bank 1500 Sept 30 Balance c/d 1500Aug 1 Balance b/d 1500
MOTOR CYCLE
2011 $ 2011 $Sept 27 Bank 1300 Sept 30 Balance c/d 1300Aug 1 Balance b/d 1300
JON DOE
2011 $ 2011 $Sept 28 Sales 936 Sept 30 Cash 700
Sept 30 Balance c/d 236 936 936Aug 1 Balance b/d 236
TELEPHONE
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2011 $ 2011 $Sept 30 Bank 500 Sept 30 Balance c/d 500Aug 1 Balance b/d 500
ELECTRICITY
2011 $ 2011 $
Sept 30 Bank 150 Sept 30 Balance c/d 150Aug 1 Balance b/d 150
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Sales Journal
Date DescriptionInvoice
no.Amount
2012Sept 10 Deedo Brown Sl 3531 162Sept 28 John Doe Sl 3532 936Sept 30 Transfer to sales account Gl 3533 1098
Purchases Journal
Date DescriptionInvoice
no.Amount
2012Sept 6 Joe’s Wholesale Pl 3144 1580Sept 19 Super Plus Sl 3145 1000Sept 30 Transfer to purchases account Gl 3146 2580
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Return Outward Journal
Date DescriptionInvoice
no.Amount
2012Sept 16 Joe’s Wholesale Pl 15Sept 30 Transfer to Purchases account Gl 15
Return Inward Journal
Date DescriptionInvoice
no.Amount
2012Sept 13 Deeds Brown Sl 3301 36Sept 30 Transfer to sales account Gl 36
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General Journal
Date Description Debit Credit2012Sept 2 Computer 50000 50000
INCSept 5 Deep Freezer 20000
Singer 2000070000 70000
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Purchases LedgerJoe’s Wholesale
2012Sept 6 Purchases PJ 1580
Super Plus2012Sept 19 Purchases PJ 1000
Joe’s Wholesale2012Sept 16 Return
OutwardROJ 15
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General LedgerComputer
2012Sept 30 INC 50000
Deep Freezer
Sept 30 Singer 20000
Purchases2012Sept 30 Credit purchases
for monthPl 2580
Sales2012Sept 30 Credit sales for
monthSl 1098
Return Outward2012Sept 16 Returns for the
monthROJ 15
Return Inward2012
Sept30 Returns for the
monthRIJ 36
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BAS Snack BarTrial Balance as at September 30, 2012
DEBIT CREDIT
Cash 19183
Bank 20904
Debtors 236
Rent 1500
Office Equipment 5000
Purchases 5735
Return Inward 36
Carriage Outward 150
Wages 1500
Drawings 1500
Motor Cycle 1300
Telephone 500
Electricity 150
Deep Freezer 20000
Computer 50000
Creditor 21565
Capital 100000
Sales 5964
Return Outward 15
Discount Received 150
127694 127694
Note:Closing Stock $1924
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BAS Snack CornerTrading Profit and Loss Account for the period ended
September 30, 2012SalesReturn InwardNet Sales
Cost of Goods SoldOpening StockPurchasesCarriage Inward
Return Outward
Closing Stock
Gross ProfitDiscount Received
ExpensesRentCarriage Outward WagesTelephone Electricity
Net Loss
5405
540515
5720(1924)
5964(36)
15001501500150500
5928
379621321502282
38001518
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BAS Snack BarBalance Sheet as at September 30, 2012
Fixed AssetOffice EquipmentMotor CycleDeep FreezerComputer
Current AssetClosing StockBank CashDebtors
Current LiabilitiesCreditor
Financed by:CapitalNet Loss
Drawings
At Cost50001300200005000076300
Depreciation
19242090419183236
42247
(21565)
N.B.V50001300200005000076300
2068296982
100000151898482150096982
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Wood, F. & Robinson, S. (2002) Principles of Accounts, Fourth Edition. Longman Publishers
Maher, M &Edwards, J. (1992) Accounting Principles, Fifth Edition. Richard D. Irwin Publishers
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