General Ledger
Date Details Folio Debit CreditJuly 1,2010 Motor Van GL 200,000
Stock:20 boxes Flash Drives GL 100,000 10 boxes of IPods GL 200,100 20 boxes USB speakers GL 100,000Debtors: M.Stamp SL 40,000 E.Boyd SL 35,000Cash at bank CB 300,00Cash in Hand CB 80,000 Loan: Royal Bank of Canada GL 100,000 Creditors : M.Brown PL 15,000 C.Steadman PL 20,000 Capital GL 1,020,000
1,155,000 1,155,000
JOURNALS
Purchases JournalDate Details Folio Amount
July 4 A.Roland GL 310,000July 4 S.Blackwood GL 375.000July 31 Transfer to Purchases a/c in the GL 683.5000
Sales JournalDate Details Folio Amount
July 8 P.Hinds SL 445,000July 10 C.Barret SL 490,000July 22 L.Richards SL 360,000July 23 M.Stamp SL 160,000July 27 R.Mair SL 228,500July 30 Transfer to the sales a/c in the GL 1,684,000
Return Inward JournalDate Details Folio Amount
July 30 R.Mair SL 32500July 31 Transfer to Return inwards a/c in the GL 32500
Return Outwards JournalDate Details Folio Amount
July 31 S.Blackwood PL 5000July 31 GL 5000
TRIAL BALANCE
Details Dr CrCapital 1,020,000
Purchases 685,000Sales 2,834,000
Return Inwards 32500Return Outwards 5000
Loan RBC 100,000Cleaning 15,000
Water 40,000Return Received 100,000
Electricity 60,000Stationery 42,000
Motor Expenses 90,000Insurance 40,000Telephone 45,000Salaries 160,000Stocks 400,000
Equipment 100,000Motor Van 200,000Creditors 560,000Debitors 1,046,500
Cash 1,003,000Bank 660,000
4,619,000 4,619,000
Computers & Accessories limitedTrading and profit and loss accountFor the month ending July 31, 2013
Sales 28340000Less Return Inwards 32500
Net Sales 2801500Less Cost Of Goods Sold
Opening Stock 400,000Add Purchases 685,000
Less Return Outwards <5000>Net Purchases 680,000
cost of goods available for resale
1,080,000
<49,6500><58,3500>
Gross Profit 2,21,8000Add Income: Rent Received 100,000
Total Income 2,318,000Less Expenses
Cleaning 15,000Electricity 60,000Stationery 42,000
Motor Expenses 90,000Insurance 40,000Telephone 45,000Salaries 160,000Water 40,000 <492,000>
Net profit 1,826,000
Computer & Accessories LTDBalance Sheet As at July 31,2013
Fixed AssetsEquipment 100,00Motor Van 200,000
300,000Current Assets
Stock 496,500Debtors 1,046,500
Cash At Bank 660,000Cash In Hand 1,003,000
3,206,000Less Current Liabilities
Creditors <560,000>Working Capital 2646000
2,946,000Less Long Term Liability
Loan RBC <100,000>2,846,000
Financed By:Capital 1,020,000
Add Net Profit 1,826,0002,846,000
Items July 1,2013 July 31,2013 ChangeClosing Stock 400,000 496,000 96,500
Debtors 75,000 1,046,000 971,00Creditors 15,000 560,000 545,000
Bank 300,000 660,000 360,000Cash 80,000 1,003,000 923,000
Ratios
Current Ratios = Current Assets/Current Liabilites =3,206,000/560,000
=5.7:1
Acid Test Raito = Current Assets-Stock/Current Liabilities =3,206,000-496,500/560,000 =4.8:1
Margin = Gross Profit/Sales * 100 =2,218,000/2,801,500 * 100 =79%
Net Profit Percentage = Net Profit/Net Sales * 100 = 1,826,000/2,801,500 * 100 = 65%
Return on Capital Employed = Net Profit/Capital Employed * 100= 1,826,000/2,846,000 * 100= 64.1%
Expenses:Net Profit = Expenses/Net Profit * 100 = 492,000/1,826,000 *100 = 26.9%
Introduction.
The business Computers & Accessories Limited is a sole proprietor business. They are located at 99 heroes circle Kingston, Jamaica. The accounting period of this sole proprietorship is July 1,2013 – July 3,.2013.. They distribute IPods, Flash Drives & USB Speakers.
SOURCE DOCUMENTS
Cheque
July 19,2013
Payee:Blackwood
Creditor ForGoods
$60,000
67439
National CommercialBank
24 Cross Roads Branch105 Slipe RoadKingston 4
Jul 19,2013
Pay: Blackwood
Sixty Thousand Dollars $60,000
Signature: O.Farr
67439
Cash Receipt
Cash Receipt
Date:July 1,2013Receive From: Boyd Fifteen Thousand Dollars $ 15,000 For Item # 467
$15,000Thank You
566468
BANK STATEMENT.
Bank Statement as at July 31,2013Date Details Dr Cr Balance
July 1,2013 Balance B/F 300,000 CrJuly 1 Boyd 15,000 450,000 CrJuly 7 Cleaning 15,000 300,000 CrJuly 14 Cash Deposit 100,000 400,000 CrJuly 16 Rent 100,000 300,000 CrJuly 17 Electricity 60,00 240,000 CrJuly 19 Barret 200,000 440,000 CrJuly 19 Roland 80,000 360,000 CrJuly 19 cheque 67439 60,000 300,000 CrJuly 21 Hinds 500,000 800,000 CrJuly 24 Insurance 40,000 760,000 CrJuly 25 Salaries 160,000 600,000 CrJuly 29 Cash Deposit 60,000 660,000 Cr
Sales Invoice
O.Farr4 heroes Circle
Kingston 4Your Purchase order 11/B/981Invoice No.74669
July 10,2013
C.Barret43 Black LaneKingstonJamaica
Per Unit Total
60 IPods30 Flash Drives35 USB Speakers
6500 1000 2000
390,00030,000 70,000 490,000
Purchases Invoice
S.Blackwood8 Atlantis Dr
Kingston 3Your invoice 12/C/982/Invoice No. 12982
July 9,2013
Computer & Accessories LTD4 Heroes CircleKingston 4Jamaica. Per Unit Total
20 Boxes Of IPods15 Boxes Of USB Speakers10 Boxes Of Flash Drive
10,0005,00010,000
200,00075,000100,000490,000
PAY ADVICE
Computers & Accessories Limited.Emp No.
482Dept06
Employee NameJames,Aldomen
NIS No. P694364
TRN-No.646-988-182
Per End31/7/2013
Description Unit Rate Amount Gross Pay
Tx-Reg PayN-TravelingNt-Meals
160 250.000 40,000.000
Net Pay $40,000.000
AIMS
1. Firstly I would like to get exposed to the accounting basis of a business 2.Another aim is to achieve pure accounts knowledge from this project..
3. I would also like to gain experience on the accounting cycle
4.i am also in the aim to achieve the best grade possible in my CSEC.
Liquidity Ratios – Comparison – Beginning With End.
Ratios July 1 July 31A) Current Raito =
Current Assets/Current Liability
855000/35000=24.4:1
3206000/560,000=5.7:1
B) Acid test Raito = Current Assets –
Stock/Current Liabilities
855000-400,000/350,00
=13:1
3206000-49600/569000
=4.8:1
Capital Employed 1.020.000 2,846,000
Ratio Analysis.
A) At the Beginning of the accounting period the Current Ratios was
24.4:1. On the other hand at the end of the accounting period July 31 the current assets could only cover the current liabilities 5.7 times.
comparing the Current Ratios at the beginning and the end of the accounting period it can be said that the business’s is failing financially
B) At the beginning of the accounting period July 1 the acid test ratio was 13:1,meaning that the current assets less stock divided by Current liabilities shows how much times the remaining current assets could cover the current liabilities. On the other hand at the end of the accounting period the Acid Test Ratio was 4,8:1 meaning that the current assets less stock divided by current liabilities shows how much times the remaining current assets could cover the Current liabilities.
The findings support that the Acid test ratio at the beginning of the period is far more than what it was at the end of the period.
Business Performance.
The business Computers and Accessories LTD made a net profit of 1,826,000 for the .The expenses took 27% of the total net profit.. The business is performing well . In Addition the business’s capital employed was 2,846,000 for the accounting period.The business as mention previously made a Net Profit of1,826,000.The Net profit took 64% of the capital employed. This can be rephrased as saying that the Net profit took $641 for every $1000 of the capital employed. Based on this information I can say that the business is performing well.
Purchases Ledger.
Dr M.Brown CrDate Detail
sFolio Amoun
tDate Details Folio Amount
Jul 2 Cash GL 6,000 Jul1 Balance b/d
Gl 15,000
Jul 2 Cash Gl 9,00015,000 15,000
Dr C.Steadman CrDate Details Foli
oAmount Dat
eDetails Folio Amount
Jul 31 Balance B/d
Gl 20,000 Jul 1
Balance B/d
GL 20,000
Aug 1
Balance B/d
Gl 20,000
Dr A.Roland CrDate Details Folio Amount Date Details Folio Amount
Jul 19 Bank Gl 80,000 Jul 4
Purchases
Gl 310,000
Jul 31 Balance c/d
Gl 230,000
310,000 310,000Aug
1Balance
B/dGl 230,000
Dr S.Blackwood CrDate Details Folio Amount Date Details Foli
oAmount
Jul 19 Bank Gl 60,000 Jul 19
Purchases Gl 375,000
Jul 31 Return Outward
s
Gl 5000
Jul 31 Balance B/d
Gl 315,000
375,000 375,000Aug
1Balance
b/dGl 310,000
Sales Ledger.
Dr M.Stamp CrDate Details Folio Amount Dat
eDetails Folio Amount
Jul 1 Balance b/d
Gl 40,000 Jul 1
Cash Gl 20,000
Jul 23 Sale Gl 160,000 Jul 31
Balance c/d
Gl 180,000
200,000 200,000Aug 1 Balanc
e c/dGl 180,000
Dr E.Boyd Cr
Date Details Folio
Amount Date
Details Folio Amount
July 1 Balance b/d
Gl 35,000 Jul 1
Bank Gl 15,000
Jul 31
Balance c/d
Gl 20,000
35,000 35,000Aug 1 Balance
B/d
Dr P.Hinds CrDate Details Foli
oAmount Date Detail
sFolio Amount
Jul 8 Sales Gl 445,000 Jul 19
Cash Gl 145,000
Jul 31
Bank Gl 300,000
445,000 445,000
Dr C.Barrett CrDate Details Foli
oAmount Date Details Folio Amount
Jul 10 Sales Gl 490,000 July 19
Bank Gl 200,000
Jul 31
Balance c/d
Gl 290,000
490,000 490,000Aug 1 Balance
B/dGl 290,000
Sales Ledger Cont’d
Dr L.Richards CrDate Details Foli
oAmount Dat
eDetails Folio Amount
Jul 22
Sales Gl 360,500 Jul 19
Bank Gl 360,500
360,500 360,500Aug 1 Balance
b/dGl 360,500
Dr R.Mair CrDate Details Folio Amount Dat
eDetails Folio Amount
Jul 24 Sales Gl 228,500 Jul 30
Return Inwards
Gl 32,500
Jul 31
Balance c/d
Gl 196,000
228,500 228,500Aug 1 Balance
b/dGl 196,000
General Ledger
Dr Purchases CrDate Details Folio Amount Dat
eDetails Folio Amount
Jul 31 Total credit
purchases for the month
685,000 Jul 31
Transfer to
Tradinc a/c
685,000
685,000 685,000
Dr Sales CrDate Details Foli
oAmount Date Detail
sFolio Amount
Jul 31 Transfer to
Trading a/c
2,834,000 Jul 3
Cash 210,000
Jul 5
Cash 550,000
Jul 26
Cash 390,000
Jul 31
Total credit sales
for the month
1,684,000
2,834,000 2,834,000
Dr Return Inwards CrDate Details Folio Amount Date Details Folio Amount
Jul 31 Total Return for the month
325,000 Jul 31
Transfer to
trading a/c
325,000
Dr Return Outwards Cr
Date Details Folio Amount
Date Details Folio Amount
Jul 31 Transfer to
trading A/c
5,000 Jul 31
Transfer
returns for the
5,000
month
General Ledger Cont’d
Dr Cleaning CrDate Details Folio Amount Date Details Folio AmountJuly 7 Bank 15,000 July
31Transfe
r to P&L
15,000
Dr Water CrDate Details Folio Amoun
tDate Details Folio Amount
July 7 Cash 40,000 July 31
Transfer to
P&L
40,000
Dr Rent Received CrDate Details Folio Amount Date Details Folio Amount
July 31 Transfer to
P&L
100,000 July 31
Transfer to
P&L
100,000
Dr Electricity CrDate Details Folio Amoun
tDate Details Folio Amount
July 17 Bank 60,000 July 31
Transfer to
P&L
60,000
Dr Insurance CrDate Details Folio Amoun
tDate Details Folio Amount
July 24 Bank 40,000 July 31
Transfer to
P&L
40,000
Dr Telephone CrDate Details Folio Amoun
tDate Details Folio Amount
July 24 Cash 45,000 July 31
Trabsfer to
P&L
45,000
Dr Salaries CrDate Details Folio Amount Date Details Folio Amount
July 25 Bank 160,000 July 31
Transfer to
P&L
160,000
Dr Stock CrDate Details Foli
oAmount Date Details Folio Amount
July 31 Balance C/d
400,000 July 31
Transfer to
trading a/c
400,000
General Ledger Cont’d
Dr Equipment CrDate Details Folio Amount Dat
eDetails Folio Amount
July 1 Balance B/d
100,000 July 31
Balance c/d
100,000
Aug 1 Balance b/d
100,000
Dr Motor Van CrDate Details Folio Amount Dat
eDetails Foli
oAmount
July 1 Balance c/d
200,000 July 31
Balance b/d
200,000
Aug 1 Balance B/d
200,000
Dr Capital CrDat
eDetaild Foli
oAmount Date Details Folio Amount
July 31
Balance c/d
2,846,000 July 1
Balance B/d
1,020,000
Jul 31
Net Profit
1,826,000
2,846,000 2,846,000Jul 31
Balance b/d
2,846,000
OTHER ACCOUNTS
Dr Debtor CrDate Details Foli
oAmount Date Details Folio Amount
Jul 1 Balance B/f
75,000 Jul 31
Cash 165,000
Jul 31 Sales 1,684,000 Jul 31
Bank 515,000
Jul 31
Return Inward
32,500
Jul 31
Balance C/d
1,046,500
1,759,000 1,759,000Aug 1 Balance
B/d1,046,500
Dr Creditors CrDate Details Folio Amount Dat
eDetails Folio Amount
Jul 31 Cash 15,000 Jul 1
Balance B/f
35,000
Jul 31 Bank 140,000 Jul 31
Purchases 685,000
Jul 31 Return Outward
5,000
Jul 31 Balance C/d
560,000
685,000 695,000Aug
1Balance
C/d560,000
CASH BOOK
Date
Details
folio
cash bank date
details folio
Cash bank
Jul 1
bal b/d
GL 80,000 300,000 Jul 2
Brown PL 6,000
Jul 1
Stamp SL 20,000 Jul 7
Cleaning GL 15,000
Jul 1
Boyd SL 15,000 Jul 15
Water Rates
GL 40,000
Jul 5
Sales SL 210,000 Jul 14
Bank C 100,000
Jul 11
Sales SL 550,000 Jul 17
Electricity GL 60,000
Jul 14
Cash C 100,000 Jul 17
Stationery
GL 42,000
Jul 16
Rent GL 100,000 Jul 17
Motor Expenses
GL 90,000
Jul 19
Barrett
SL 200,000 Jul 19
Roland PL 80,000
Jul 21
Hinds SL 145,000 500,000 Jul 19
Blackwood
PL 60,000
Jul 26
Sales SL 390,000 Jul 24
Insurance GL 40,000
Jul
Cash C 60,000 Jul 24
Telephone Charges
GL 45,000
29Jul 25
Salaries GL 160,000
Jul 28
Brown PL 9,000
Jul 29
Bank C 60,000
Jul 31
Bal c/d 1,003,000
660,000
1,395,000
1,075,000
1,395,000
1,075,000
Aug 1
Bal b/d
1,003,000
660,000
Recommendations For The Improvement Of The Business.
- A recommendation to improve the performance of the business is to reduce the amount of credit sales that occurred within the accounting period.This in turn would reduce the amount the business stands to lose in the case of a bad debt.
- To increase sales I recommend a 9% price decrease on USB speakers. Bringing the price from $2000 to 1820, with this price reduction, customers will be encouraged to buy more of this product.
- To compliment the selling of IPods I recommend the implementation of earphones in The line of products offered. The
reason behind this is because of the increasing demand for earphones.
Conclusion.
This project took me out of me a lot of time and energy but I was persistent to pull through with help from my teachers and family .After completeion of this SBA I am satisfied with the knowledge and experience gained in the accounting I will then utilize this knowledge in achieving a distinction in my final accounting examination.
STOCK EVALUATION
Flash Drive
Date Details Amount in unit
Unit cost Total value Amount in unit
Unit cost Total value Amount in unit Unit cost
Total value
Jul 1 Bal b/d 400 500 200,000 - - - 400 500 200,000Jul 4 Purchases 300 500 150,000 - - - 700 500 350,000Jul 5 Sales - - - 30 500 15,000 670 500 335,000Jul 8 Sales - - - 40 500 20,000 630 500 315,000Jul 9 Purchases 200 500 100,000 - - - 830 500 415,000Jul 10 Sales - - - 30 500 15,000 800 500 400,000Jul 11 Sales - - - 80 500 40,000 720 500 360,000Jul 22 Sales - - - 30 500 15,000 690 500 345,000Jul 26 Sales - - - 60 500 30,000 600 500 300,000Jul 27 Sales - - - 20 500 10,000 580 500 290,000
Date Details Amount in unit Unit cost Total value Amount in unit Unit cost Total value Amount in unit Unit cost Total ValueJul 1 Bacl c/d 100 1000 100,000 - - - 100 1000 100,000Jul 4 Purchases 100 1000 100,000 - - - 200 1000 200,000Jul 5 Sales - - - 20 1000 20,000 180 1000 180,000Jul 8 Sales - - - 50 1000 50,000 130 1000 130,000Jul 9 Purchases 200 1000 200,000 - - - 330 1000 330,000Jul 10 Sales - - - 60 1000 60,000 270 1000 270,000Jul 11 Sales - - - 60 1000 60,000 210 1000 210,000Jul 22 Sales - - - 45 1000 45,000 165 1000 165,000Jul 23 Sales - - - 20 1000 20,000 145 1000 145,000Jul 26 Sales - - - 40 1000 40,000 105 1000 105,000Jul 27 Sales - - - 25 1000 25,000 80 1000 80,000Jul 30 Purchases 5 1000 5000 - - - 85 1000 85,000Jul 31 Sales - - - 5 1000 5000 80 1000 80,000
Acid test ratio
Current ratio
13
24.4
4.8
5.7
Comparison of Ratio-Begining of accounting period with end-Liquidity ratio
1-Jul 31-Jul