Poa

Mia’s Wholesale & Retail

Statement of Affairs as at 31 December 2014

$ $Fixed assetsPremises 130,000Fixtures & Fittings 25,000

155,000

Current assetsStock 12,000Debtors 5,600Bank 9,000Cash 510

27,110

Less current liability Creditors 1,500

Net current assets 25,610180,610

Financed by :Capital 180,610

OPENING JOURNAL ENTRIES

JournalDate Details Folio Dr. Cr.

2014January 1 Premises

FixturesStockDebtors – M. Lyn J. JamesBank CashCreditors – R. GrahamCapital

GLGLGLSLSLCBCBPLGL

$130,00025,00012,0003,0002,6009,000510

182,110

$

1,500180,610182,110

Sales Journal Date Details Folio Debit $ ¢ Credit $ ¢January 1 M. Lane SL 2,700 00January 29 C. Browne SL 4,900 00January 31 Transfer to sales

a/cGL 7,600 00

Purchases JournalDate Details Folio Debit $ ¢ Credit $ ¢January 3 R. Graham PL 1620 00January 10 R. Gordon PL 5,434 00January 31 Transfer to

purchases a/cGL 7,054 00

Return Inwards JournalDate Details Folio Debit $ ¢ Credit $ ¢January 17 M. Lane SL 300 00January 31 Transfer to R.I.

a/cGL 300 00

Return Outwards JournalDate Details Folio Debit $ ¢ Credit $ ¢January 11 R. Gordon PL 452 00January 31 Transfer to

R.O. a/cGL 452 00

General JournalDate Details Folio Debit $ ¢ Credit $ ¢

Cash 510 00Bank 9000 00Stock 12000 00Premises 130000 00Fixtures and Fittings

25000

Debtors 5600 00Creditors 1500 00Capital 180610 00

182110 00 182110 00

CASH BOOKDate Details Folio D.A Cash Bank Date Details Folio D.R Cash BankJan 1 Balance B/F $510 $9,000 Jan 7 Carriage

InwardsGL $350

Jan 6 Sales GL $1,504 Jan 7 R. Graham PL $75 $1,425

Jan 18 Sales GL $4,664 Jan 9 Sundry Expense

GL $290

Jan 26 M. Lyn SL $125 $2,375 Jan 13 Refrigerator GL $7,000

Jan 30 J. James SL $1,820 Jan 15 Wages GL $2,000

Jan 31 Cash C $3,000 Jan 24 Drawings GL $400

Jan 28 SundryExpense

GL $850

Jan 29 Carriage Inwards

GL $450

Jan 31 Bank C $3,000

Jan 31 Balance C/D $1788 $5320

$125 $6678 $16,195 $75 $6678 $16,195

Feb 1 Balance B/D $1788 $5320

`

Sales Ledger

Date Details Folio Amt $ ¢ Date Details Folio Amt $ ¢

M. LANE A/C

Jan 1 Sales SJ 2700 00 Jan 17 R. Inwards

SJ 300 00

Jan 31 Balance C/D 2400 00

2700 00 2700 00

Feb 1 Balance B/D 2400 00

M. LYN A/C

Jan 1 Balance B/F 3000 00 Jan 26 Bank C 2375 00

Jan 26 Discount C 125 00


3000 00 3000 00


C. BROWNE A/C

Jan 29 Sales SJ 4900 00 Jan 31 Balance C/D 4900 00

4900 00 4900 00


J. JAMES A/C

Jan 1 Balance B/F 2600 Jan 30 Bank C 1820 00

Jan 30 Bad Debt 780 00

2600 00 2600 00

Purchases Ledger


R. GRAHAM A/C

Jan 7 Discount C 75 00 Jan 3 Balance B/F 1500 00

Jan 7 Bank PJ 1425 00 Jan 3 Purchases 1620 00


3120 00 3120 00


R. GORDON A/C

Jan 11 R. Outwards

PJ 452 00 Jan 10 Purchase 5434 00


5434 00 5434 00


General Ledger


WAGES AND SALARIES A/C

Jan 15 Bank C 2000 00 Jan 31 Balance C/D 2000 00

2000 00 2000 00


CARRIAGE OUTWARDS A/C

Jan 29 450 00 Jan 31 Balance C/D 450 00

450 00 450 00


BAD DEPT A/C

Jan 30 J. James C 780 00 Jan 31 Balance C/D 780 00

780 00 780 00


DISCOUNT ALLOWED A/C

Jan 31 Total Discount Allowed for the month

125 00 Jan 31 Balance C/D 125 00

125 00 125 00


General Ledger


SUNDRY EXPENSE A/C

Jan 9 Cash C 290 00 Jan 31 Balance C/D 1140 00

Jan 28 Cash C 850 00

1140 00 1140 00


CARRIAGE INWARDS A/C


350 00 350 00


SALES A/C

Jan 31 Balance C/D 13,768 00 Jan 6 Cash C 1504 00

Jan 18 Cash C 4664 00

Jan 31 Total Credit Sales for the month

7600 00

13,768 00 13,768 00

Feb 1 Balance B/D 13,768 00

General Ledger


REFRIGERATOR A/C

Jan 31 Bank C 7000 00 Jan 31 Balance C/D 7000 00

7000 00 7000 00


RETURN INWARDS A/C

Jan 31 Total Return Inwards for the month

300 00 Jan 31 Balance C/D 300 00

300 00 300 00


RETURN OUTWARDS A/C

Jan 31 Balance C/D 452 00 Jan 31 Total Return Outwards for the month

452 00

452 00 452 00

Feb 1 Balance B/D 452

General Ledger


PREMISES A/C

Jan 1 Balance B/F 130,000 00 Jan 31 Balance C/D 130,000 00

130,000 00 130,000 00


FIXTURES AND FITTINGS A/C


25,000 00 25,000 00


DRAWINGS A/C


400 00 400 00


PURCHASES A/C

Jan 31 Total Credit Purchases for the month

7054 00 Jan 31 Balance C/D 7054 00

7054 00 7054 00


General Ledger


STOCK A/C


12,000 00 12,000 00


CAPITAL A/C

Jan 31 Balance B/F 180,610 00 Jan 26 Balance B/F 180,610 00

180,610 00 180,610 00


Dr. Sales Ledger Control A/C Cr.Jan 1 Balance B/F $5600 Jan 31 Sales for the month $7600

Jan 31 Bank $4195 Jan 31 Discount Allowed $125

Jan 31 Return Inwards $300Jan 31 Bad Dept $780Jan 31 Balance C/D $7800

$13,200 $13,200Feb 1 Balance B/D $7800

Dr. Purchases Ledger Control A/C Cr.Jan 31 Return Outwards $452 Jan 31 Bank $1425 Jan 31 Discount Received $75 Jan 31 Balance C/D $6602

$8554

Jan 1 Balance B/F $1500 Jan 31 Sales for the month $7054

$8554Feb 1 Balance B/D $6602

Trial Balance as at 31 January 2014Debit $ Credit $

Capital 180,610Cash 1788

Bank 5320Purchases 7054Sales 13,768M. Lane 2400M. Lyn 500C. Browne 4900R. Graham 1620R. Gordon 4982Wages & Salaries 2000Carriage Inwards 350Bad Dept 780Discount Allowed 125Sundry Expense 1140Carriage Outwards 450Refrigerator 7000Return Inwards 300Return Outwards 452Premises 130,000Drawings 400Fixtures & Fittings 25,000Stock 12,000Discount Received 75

201,507 201,507

Adjusted (Updated Cash Book) (Bank Column only)Jan1 Balance B/F $5320 Jan Credit Transfer $750

Jan Standing Order $500 Jan Stamp Duty $50 Jan Bank Charges $340 Jan Balance C/D $5330

$6220Feb1 Balance B/D $5330

$6220

Bank Reconciliation Statement as at 31 January 2014

Balance as per adjusted Cash Book $5330Add Unpresented Cheques $450

$5780Less late Lodgements $1820Balance as per bank statement $3960

Trading Profit and Loss A/C for month ended 31 Jan 2014Sales 13,768Less Return Inwards 300Net Sales 13,468

Less COGS:Opening Stock 12,000Add Purchases 7054Add Carriage Inwards 350Gross Purchases 7404Less Return Outwards 452Net Purchases 6952

Cost of goods available for sale 18,952

Less Closing Stock 10,400

COGS: 8552Gross Profit 4916Add Revenue:Discount Received 75

4991Less Expenses:Carriage Outwards 450Discount Allowed 125Wages & Salaries (2000-250) 1750Sundry Expense (1140 +150) 1290Bad dept 780Prov. For Bad dept (5/100x 7800=390/12=32.50)

33

DepreciationFixtures & fittings (5/100x25000=1250/12=104.17)

104

Refrigerator (10/100x7000=700/12=58.33) 584590

Net Profit 401

Balance Sheet as at 31 January 2014

$ $ $Fixed assetsPremises 130,000

Fixtures & FittingsLess Depreciation

RefrigeratorLess Depreciation

25,000104

700058

24,896

6942 161,838

Current AssetsStock 10,400Trade Debtors 7800Less Prov. For Bad Dept

Cash at BankPrepaid ExpensesCash

3377675320 250178825,525

Less Current liability Trade CreditorsAccrued Expense

6600150

6752 18,773 180,611

Financed by :CapitalAdd Net Profit

Less Drawings

180,610401

181,011400

180,61

Ratio Analysis and Interpretation of ResultsWorking Capital Ratio

Comparison made: Opening vs. Closing

Working Capital: Current Assets – Current Liabilities

= $27,110 - $25,610

This reveals that at the beginning of the month the working capital was $27,110, however at the end it was reduced by $1,500 to $25,610 a decrease of 5.5%

Solvency Ratio

(a)Current Ratio

Opening: Current AssetsCurrent Liabilities Closing: Current Assets

Current Liabilities

=$27,110$1,500 = $25,525

$6,752 =18:1 = 4:1

This means that at the beginning of the month there were enough current assets to pay off current liabilities 18 times. However at the end of the month this was reduced to 4 times so to every 1 liability it could be paid off only 4 times.

(b)Acid Test RatioComparison made: Opening vs. Closing

Opening: Current Assets−StockCurrent Liabilities Closing: Current Assets−Stock

Current Liabilities

= $27,110−$12,0001,500 =

$25,525−$ 10,400$ 6,752

= $15,110$1,500 = $15,125

$6,752

= 10:1 = 2:1

This means that at the beginning of the month there were enough liquid assets to cover liabilities 10 times. However at the end of the month this was reduced to 2 times resulting in assets being able to pay off liabilities only 2 times.

Gross Profit as a Percentage of Sales

Formula: Gross ProfitNet Sales×100

= 4,91613,468

×100

= 35.5%

This means that for every $100 of sales, $35.50 gross profit was made before any expenses were paid and contributed to net profit.

Net Profit as a Percentage of Sales

Formula: Net ProfitNet Sales×100

= 40113,468

×100

=3%

This means that for every $100 of sales, Mia’s owner is gaining 3%

Gross Mark-Up

Formula: Gross ProfitCost of goods sold

×100

= $ 4,916$ 8,552

×100

= 57.5%

This shows how much gross profit is made for every $100 spent on buying goods for resale. This means that the mark up was adequate to arrive at the selling price

Turn Over Ratio

Formula: Cost of goods soldAverage Stock Average Stock = OpeningStock+Closing Stock2

= $8,552$11,200 = $12,000+$10,400

2

= 0.76 = $22,4002

= $11,200

This means that stock is being converted into sales less than 1 time during the month of January.

Debtor Ratio This measures the length of time taken for debtors to pay Mia’s.

= DebtorsSales for t he year

×31

= $7,800$13,768

×31

=18 days

This means that Mia’s Wholesale & Retail took 18 days to collect outstanding funds from their credit customers.

Creditor Ratio

This measure the length of time taken by Mia’s to pay their suppliers.

= CreditorsPurc hases for t he year

×31

= $ 6,602$7,054

×31

= 29 days

This means that it took Mia’s Wholesale & Retail 29 days to pay their suppliers.

Expenses as a Percentage of Sales

Formula: ExpensesSa les×100

= $ 4,590$13,768

×100

= 33.3 %

This shows what percentage of sales is an individual expense to Mia’s.

Return on Capital Employed Ratio

Formula: Net ProfitCapitalEmployed

×100 Capital = OpeningCapital+ClosingCapital2

= $401$180,611

×100 = ($180,610+$180,611)2

=0.22% = $361,2212

= $180,611

This means that Mia’s received a net profit of only 22¢ per $100.

Mia’s

Wholesale& Retail

TABLE OF CONTENT

Name: Tamia Mclean

Subject: POA

Centre Number: 100033

Territory: Jamaica

Date Submitted:

Pool: 5:3

Acknowledgement………………………………………………………………………1

Aim of the Project…………………………………………………………………..……2

Statement of Affairs……………………………………………………………………..3

Opening Entries………………………………………………………………………….4

BOOKS OF ORIGINAL ENTRIES

Sales Journal………………………………………………….………………….5 Purchases Journal…………………………………………………….…………..5 Return Inwards Journal…………………………………………………………..5 Return Outwards Journal……………………………………...…………………5

Cash Book…………………………………………………….…….……………………6

Sales Invoice…………………………………………………………..….………………7

Receipt………………………………………………………………..………….……….8

LEDGERS

Sales Ledger………………………………………………………...……………9 Purchases Ledger…………………………………………………………..…….10 General Ledger…………………………………………………………….…….11-15

CONTROL ACCOUNTS

Sales Ledger Control A/C……………………………………………..…………………16

Purchases Ledger Control A/C………………………………………….….……………16

Trial Balance………………………………………………………….………………….17

Updated Cashbook………………………………………………………………………18

Bank Reconciliation Statement……………………………………………….…….……18

Trading Profit and Loss A/C……………………………………………………………..20

Balance Sheet…………………………………………………………………………..…21

Ratio Analysis & Interpretation of Results……………………………………... …….….22-25

BOOKS OF ORIGINAL

ENTRY

LEDGERS

CONTROL ACCOUNTS

ACKNOWLEDGEMENTI am using this opportunity to express my gratitude to everyone who supported me throughout the course of this School Based Assessment. I am thankful for their aspiring guidance, invaluable constructive criticism and friendly advice during this project. I am sincerely grateful to my Principles of Accounts teacher Mrs. Williams and to God for giving me the strength and understanding to complete this assignment.

Aim of the ProjectThe aim of my project is for me to arrive at a comprehensive understanding of the financial sector of the business world. To draw up the financial records for the year 2014 for Mia’s Wholesale and Retail and to comment on the entity’s performance using appropriate tools of Analysis.

Date post:	17-Jul-2016
Category:	Documents
Upload:	adrianproud
View:	91 times
Download:	1 times

Poa

Documents