Professional Documents
Culture Documents
I
Table of Contents
Title Page
Title Page..............................................................................................................................I
Table of Contents................................................................................................................II
Introduction..........................................................................................................................1
Acknowledgement...............................................................................................................2
Aims of Project....................................................................................................................3
Description of Business.......................................................................................................4
Performance of Business....................................................................................................23
Interpretation of Results...............................................................................................24-28
Comparison...................................................................................................................29-30
Recommendation...............................................................................................................31
Conclusion.........................................................................................................................32
Appendix......................................................................................................................33-37
II
Introduction
Jenson Johnson owner of Jenson Johnson Hardware has been in operation for 6 six years now, he
wishes to obtain a loan from the national commercial bank (NCB). Jenson Johnson has hired an
accountant to see if he will be able to get a loan. In this report there will be a presentation on the
1
Acknowledgement
The researcher wishes to first and foremost express gratitude of thanks to the creator for the
strength, knowledge and understanding in other to effectively complete this School Based
Assessment (S.B.A.). The researcher would like to thank the Caribbean Examination Councils
Caribbean History syllabus for administering this research topic to make this S.B.A. valid. The
researcher would like to thank his Principles of Accounts teacher for seeing this topic suitable for
him to undertake. The researcher would like to show appreciation to deCarteret College School
family for providing him with necessary materials to complete this S.B.A. including the school
library and computer laboratories. The researcher would like to show appreciation to his parents,
companions and friends for encouraging him to do his best throughout this S.B.A.
2
Aims of Project
3
Description of Business
Jenson Johnsons Hardware Store is sole proprietor owned and operated by Jenson Johnson in a
competitive market. Jenson Johnson sells and delivers various hardware supplies such as cement,
marl, sand etc. to different places at reasonable prices to its trusted customers. Jenson Johnsons
4
Accounting Procedures Used and Records Kept
General Journal- This records transactions that are not in the other books of original entry.
5
$
23,520.0
Dec.28 Tools Ltd. 0
Returns Inwards Journal- records all goods returned to the business by its customers.
Jenson Johnson
6
Purchases Journal Record all credit purchases
Purchases Journal(Page96)
Date Details Invoice# Folio Amount
Dec.3 Building Supplies PL31 $ 16,625
Dec.3 Jon's Hardware PL32 $ 5,700
Dec.11 D&P Hardware PL51 $ 15,000
Dec.11 Building Supplies PL52 $ 56,000
Dec.11 Grano's PL53 $ 15,000
Transfer credit purchases GL48 $ 108,325
Returns Outward Journal- Accounts for all goods return by the business to its
supplier.
Jenson Johnson
Return Outward Journal Pg.7
Date Details Note No. Folio $
Dec.1
5 Grano's 9/345 PL94 500
Dec.1
6 Building Supplies 9/453 PL55 1,200
1,700
Sales7Ledger
Sales Ledger Jason Hill
De
tail
Date Details $ Date s $
Dec. Dec.
2013 2013
Re
tur
n
$ In $
Dec. 80 Dec. wa 79
1 Bal b/f 0 22 rd 8
$ $
9, Ba 9,
Dec. 00 Dec l 00
9 Sales 0 .31 c/d 2
$ $
9, 9,
80 80
0 0
2014
$
9,
Jan. 00
1 Bal b/d 2
John Thompson
Date Details $ Date Details $
2013 2013
$ Bank $
Dec.1 Bal b/f 5,225 Dec.28 Discount 8,500
$ Discount $
Dec.9 Sales 3,500 Dec.31 Allowed 225
$ $
8,725 8,725
Samuel Mundy
Date Details $ Date Details $
2013 2013
Dec. $ Dec.1 $
1 Bal b/f 6,060 6 Cash 6,000
Dec.3 Bad $
1 Dept 60
$ $
6,060 6,060
Jeneffy Gayle
2013 2013
$ Return $
Dec.23 Sales 18,000 Dec.24 Inward 1,200
$
Dec.26 Bal c/d 16,800
$ $
18,000 18,000
Purchases9 Ledger
Building Supplies
Date Details $ Date Details $
2013 2013
Dec.1 $ $
6 Return Outward 1,200 Dec.1 Bal b/d 9,000
$
Dec.3 80,42 Purchase $
1 Bal c/d 5 Dec.5 s 16,625
Dec.1 Purchase $
1 s 56,000
$
81,62 $
5 81,625
2014
$
Jan.1 Bal b/f 80,425
Jon's Hardware
Date Details $ Date Details $
2013 2013
$
5,70 Dec. Purchase $
Dec.31 Bal c/d 0 3 s 5,700
$
5,70 $
0 5,700
2014
$
Jan.1 Bal b/d 5,700
10
Grano's
Date Details $ Date Details $
2013 2013
Dec.15 Return Outward $ 500 Dec.1 Purchases $ 15,000
Dec.31 Bal c/d $ 14,000
$ 15,000 $ 15,000
2014
Jan.1 Bal b/d $ 14,500
D & P Hardware pg.62
$
2013 Folio $ Folio $
2,013
$ $
Dec. 18 Bank CB64 Dec. 11 Bal. b/f GJ
4,275 4,500
Disc. $ $
Dec. 18 CB64 Dec. 11 Purchase PDB49
Rec. 225 15,000
$
Dec. 31 Bal c/d ---
15,000
$ $
19,500 19,500
$
2,014
$
Jan. 1 Bal b/d
15,000
Capital A/C
Date Details Folio $ Date Details Folio $
$
Dec. Bal c/d 725,685 Dec.1 Bal b/f $ 725,685
$
725,685 $ 725,685
2014
Jan.1 Bal b/d $ 785,685
Computer A/C
Date Details Folio $ Date Details Folio $
Dec.15 Computer Tech 35,000 Dec.31 Bal c/d 35,000
35,000 35,000
2014
Jan.1 Bal b/d
35,000
12
Purchases A/C
Date Details Folio $ Date Details Folio $
Trading
Dec.2 Bank 60,000 Dec.31 A/C 168,325
Dec.31 Purchases Journal 108,325
168,325 168,325
2014
Jan.1 Bal b/d 168,325
Discount Allowed A/C
Date Details Folio $ Date Details Folio $
Dec.28 John Thompson 225 Dec.31 Bal c/d 225
225 225
2014
Jan.1 Bal b/d 225
13
Insurance A/C
Date Details Folio $ Date Details Folio $
Profit&Los
Dec.30 Cash 3,000 Dec.31 s 3,000
3,000 3,000
2014
Jan.1 Bal b/d 3,000
2,000 2,000
2014
Jan.1 Bal b/d 2,000
2014
Jan.1 Profit&Loss 5,000
14
2,352 2,352
2014
Jan.1 Bal b/d 2,352
60 60
2014
Jan.1 Bal b/d 60
15
Transportation A/C
Date Details Folio $ Date Details Folio $
Dec.31 Cash 800 Dec.31 Bal c/d 800
800 800
2014
Jan.1 Bal b/d 800
Sales A/C
Date Details Folio $ Date Details Folio $
Dec.31 Trading A/C 35,900 Dec.8 Cash 23,500
Dec.10 Cash 1,900
Dec.17 Cash 8,000
Sales
Dec.31 Journal 30,500
135,900 135,900
2014
Jan.1 Bal b/d 135,900
Wages A/C
Date Details Folio $ Date Details Folio $
Bal Profit
Dec.5 Cash 22,000 c/d & loss 166,000
Dec.12 Cash 22,000
Dec.19 Cash 22,000
Dec.25 Cash 20,000
Dec.31 Bank 80,000
166,000 166,000
Jan.1 Bal b/d 166,000
16
Drawings A/C
Date Details Folio $ Date Details Folio $
Dec.9 Cash 1,000 Dec.31 Capital 1,000
1,000 1,000
2014
Jan.1 Bal b/d 1,000
Rates A/C
Date Details Folio $ Date Details Folio $
Dec.30 Cash 1,500 Dec.31 Profit & 1,500
Loss
1,500 1,500
2014
Jan.1 Bal b/d 1,500
209,000 209,000
2014
Jan.1 Bal b/d 209,000
17
Land A/C
Date Details Folio $ Date Details Folio $
Dec.1 Bal b/f 300,000 Dec.31 Bal c/d 300,000
300,000 300,000
2014
Jan.1 300,000
Fixtures A/C
Date Details Folio $ Date Details Folio $
Dec.1 Bal b/f 18,000 Dec.31 Bal c/d 30,500
Dec.1 Bank 12,500
30,500 30,500
2014
Jan.1 Bal b/d 30,500
Stock A/C
Date Details Folio $ Date Details Folio $
Trading
Dec.1 Bal b/f 22,100 Dec.31 A/C 22,100
22,100 22,100
2014
Jan.1 Bal b/d 22,100
18
Water A/C
Date Details Folio $ Date Details Folio $
Profit &
Dec.29 Bank 2,900 Dec.31 Loss 2,900
2,900 2,900
2014
Jan.1 Bal b/d 2,900
2014
Jan.1 Bal b/d 40,000
19
Jenson Johnsons
22
Performance of the Business
Jenson Johnsons Hardware Store keeps adequate records for the business to illustrate the
performance over the financial period for the year 2013. After examination of the books, the
accountant realized that the business was operating at a loss, and Jenson Johnson Hardware Store
After the preparation of financial statements, the Trading, Profit and Loss Accounts shows gross
loss of forty thousand three hundred and twenty-three dollars ( $40, 323) at the end of the
financial period. As well as a net loss of $177, 533. The total expenses for the business were
$177,885.
81%
If Jenson Johnson does not find a way to fix this then he will have to declare bankruptcy.
Interpretation of Results
23
Ratios are used to interpret financial statements. Ratio analysis can be used to review trends. The
following below are ratios that were used to assess the business.
Net Sales
-$40323 x 100%
$133902
= -30.11%
The Gross Profit Margin shows that for every $100 there is a $30.11 that is taken before any
Net Sales
-$26333 x 100%
$133902
= -19.67%
The above Net Profit Margin shows that for every $100 made there is a $19.67 net loss after
Stock Turnover:
Average Stock
$174225
$18350
= 9.49 times
The ratio above shows the number of times the average stock is sold for the year. This means
Jenson Johnson bought and sold stock 9.49 times for the year.
LIQUIDITY: 26
Current Ratio:
Current Asset
Current Liabilities
$105925
$135625
= 0.78:1
The above ratio shows that for every $1 sold there is $0.78 in current assets available to pay off
current liabilities.
Test Ratio:
Current Assets Stock
Current Liabilities
$105925-14500
$135625
27
= 0.67:1
The above ratio means that for $1 sold there is $0.67 of liquid assets.
28
Comparison
The comparisons below shows the comparison between opening and closing balances for that
financial year. The importance of this is to see how much the business has money the business is
Stock Comparison
40%
60%
Jenson Johnson Hardware opening stock was $22, 100 and the closing stock is $ 14,500 for the
financial year. Jenson Johnson needs to find ways to increase his sales in order to reduce the high
29
Sales vs Purchases
45%
55%
Sales Purchases
According to the figure above the amount spend on goods bought by the business is too costly
and is not subsidized by sales. Johnson can find alternative sources of the necessary goods
needed.
Recommendation
Asset deficiency is a sign of financial distress and to solve this, Johnson needs to increase
his current assets and decrease the amount of liability that he takes into the business if he
sold. The business therefore needs to boost it sales by increasing sales force, start online
buying on credit, this will encourage prompt payment & also increase the sales figure.
30
Conclusion
31
Appendix
32
INVOICE
Jenson Johnsons Hardware Store
Black Port road, Mandeville, Manchester
John Thompson Telephone: (876) 998-4565
33
CREDIT NOTE
Jenson Johnsons Hardware Store
Black Port Road, Mandeville, Manchester
Jeneffy Gayle Telephone: (876) 998-4564
1 face basin 58 58
3 Wrench 44 142
2 doors 350 700
6 pipes 50 300
1,200
34
DEBIT NOTE
Building Supplies,
Black Port Road, Mandeville. Manchester
Jenson Johnson Telephone: (876) 236-8970
8 Cement 50 400
100 blocks 20 800
1,200
35
Date December 29, 2013.
FOR rent
36
37