Professional Documents
Culture Documents
Acknowledgements 3
Aim 4
Description of Business 5
Accounting Procedures 6
Interpretation of Results 24
Comparisons 25
Recommendations 27
Conclusion 28
Appendix 29
2
ACKNOWLEDGEMENTS
We would like to thank Ms. Harewood for guiding us and ensuring that the business ran smoothly
3
AIMS
2. To analyze the performance of the business using the appropriate tools of analysis.
4
DESCRIPTION OF BUSINESS
The name of the business was ‘HC Sweet Treats’ and it operated as a sole proprietorship. It
consisted of one banker, three book-keepers, four buyers and 4 sellers. The stock of the business
consisted of confectionery items including: lollipops, puffs, nerds and other chewable sweets. They
were sold before, after and during school. The business was conducted over a period of nine days
5
ACCOUNTING CYCLE
In the accounting cycle there are a set of procedures which are followed in the sequence in each
accounting period or trading period. The sequence of the accounting cycle is Journalizing, Posting
to the Ledger, Trial Balance, Adjustments and Closing entries and Final Accounts.
Journalizing is the recording of the transactions in the books of original entry. HC Sweet Treats
recorded their transactions when they submitted the money that was collected, then calculated how
Posting to the ledger is the transferring of all debit and credit entries from the books of original
The trial balance is the making of a list of all of the debit and credit balances in the ledger.
Adjustments and closing entries are the corrections to certain accounts to allow for accruals,
Final Accounts is the preparation of the trading and profit and loss accounts and the balance sheet.
Sweet treats followed the step of the accounting cycle which include:
General Journal - This is the book in which credit sales, and purchases are first recorded. This is
used to show the assets and liabilities at the beginning of the business.
6
Sales Journal - This is the book of original entry for credit sales.
Purchases Journal - This is the book of original entry for credit purchases.
Returns Inwards journal - This is the book of original entry for goods returned to suppliers.
General Ledger - This is the ledger for all the accounts other than those for customers and
suppliers.
Sales Ledger- This a ledger used to record the personal accounts of customers concerning credit
sales.
Purchases Ledger- This is a ledger used to record the personal accounts of customers concerning
credit purchases.
Cash Book- This is a book of original entry for cash and bank receipts and payments.
Debit note- This is a document sent to a supplier showing the allowance to be given for
unsatisfactory goods.
Credit Notes- This is a document sent to a customer showing the allowance given by a
Purchases Invoice- This is a document received by a purchaser showing details of goods bought.
Sales Invoice- This is a document showing the details of goods sold and the prices of those goods.
Trial Balance- This is a list of the account titles and their balances in the ledgers on a specific
date.
7
SWEET TREATS LIST OF TRANSACTIONS
8
BOOKS OF ORIGINAL ENTRY
Purchase Day Book
Date Details Invoice Folio Amt Amt
Sept 25, 2017 Index Ltd 001 PL $50.00
9
BOOKS OF ORIGINAL ENTRY
Purchases Return Day Book
Date Details Credit Note Folio Amt Amt
Sept 25, 2017 Index Ltd 003 PL 1 $5.00
10
BOOKS OF ORIGINAL ENTRY
Sales Day Book
Date Details Credit Note Folio Amt Amt
Sept 20, 2017 K. Best 005 SL $3.00
Sept 30, 2017 Total Credit sales transferred to the Sales A/C
in the General Ledger 006 GL $3.00
11
BOOKS OF ORIGINAL ENTRY
Sales Returns Day Book
Date Details Debit Note Folio Amt Amt
Sept 20, 2017 K. Best 007 SL $0.75
12
CASH BOOK
Date Details Folio Discount Cash Bank Date Details Folio Discount Cash Bank
Sept Sept
$ $ $ $
2017 2017
18 Balance b/d $ 170.00 18 Purchases GL 2 $ 150.08
20 Sales GL 1 $ 247.80 20 Purchases GL 2 $ 40.00
20 Cash C $ 50.00 21 Purchases GL 2 $ 49.50
20 K. Best SL 2 $ 2.25 25 Purchases GL $ 100.95
21 Sales GL 1 $ 75.50 26 Index Ltd PL 1 $ 45.00
22 Sales GL 1 $ 68.50 26 Purchases GL 2 $ 127.14
26 Sales GL 1 $ 262.85 29 Cash C $ 50.00
26 Cash C $ 50.00 29 Wages GL 1 $ 200.00
27 Sales GL 1 $ 123.25 29 Expenses GL 2 $ 40.00
27 Cash C $ 75.00 29 Expenses GL 2 $ 10.00
28 Sales GL 1 $ 189.60
29 Sales GL 1 $ 11.00
29 Bank C $ 50.00
31 31 Balance c/d $ 263.08 $ 125.00
$ 1,200.75 $ 175.00 $ 1,200.75 $ 175.00
13
REVISED CASH BOOK
2017 $ 2017 $
Bank
Sept 30 Bal b/d $ 125.00 Sept 30 Charges $ 10.00
Credit
Sept 30 Transfer $ 20.00
Sept 30 Bal c/d $ 95.00
14
GENERAL JOURNAL
15
GENERAL LEDGER
Sales A/C
Date Details Folio Am
Sept 8 Cash CB $ 247.80
Cash CB $ 75.50
Cash CB $ 68.50
Cash CB $ 262.85
Cash CB $ 123.25
Cash CB $ 189.60
Cash CB $ 11.00
Total Credit Sales SJ $ 3.00
16
Purchases Returns
17
GENERAL LEDGER
Bank
Sept 18 GJ Capital $170.00 Sept 20 GJ Cash $150.00
Sept 26 GJ Cash $50.00
Sept 27 GJ Cash $75.00
Sept 29 GJ Cash $50.00
30-Sep Bal c/d
$325.00 $325.00
Cash
Sept 20 GJ Bank $150.08 29-Sep Wages CB $ 200.00
Sept 26 GJ Bank $50.00 29-Sep Expenses CB $ 40.00
Sept 27 GJ Bank $75.00 29-Sep Expenses CB $ 10.00
Sept 29 GJ Bank $50.00
30-Sep Bal c/d $ 75.00
$325.00 $325.00
Capital
Sept 18 GJ Bank $ 170.00
18
GENERAL LEDGER
Wages
$ 200.00 $ 200.00
General Expenses
$ 10.00 $ 10.00
Departmental Expenses
$ 40.00 $ 40.00
19
PURCHASE LEDGER
Index Ltd
Date Details Folio Am Date Details Folio Am
Sept 25 Returns PRDB $100.95 Sept 25 Purchase PDB $50.00
SALES LEDGER
K. Best
Date Details Folio Am Date Details Folio Am
Sept 20 Sales SRDB $ 3.00 Sept 20 Returns SDB $ 0.75
20
TRADING AND PROFIT AND LOSS
For the Year Ended September 30, 2017
Details $ $ $
Sales $ 981.50
Returns In $ 0.75
Net sales $ 980.75
Purchases $ 517.67
Returns out $ 5.00
Net Purchases $ 512.67
Gross profit $ 468.08
Expenses
Wages $ 200.00
Departmental
Expenses $ 40.00
General Expenses $ 10.00
Bank charges $ 10.00
Total Expenses $ 260.00
Net Profit $ 208.08
BALANCE SHEET
As at September 30, 2017
$ $
Current Assets
Cash $ 263.08
Bank $ 95.00
Red Cross $ 20.00
Total Current Assets $ 378.08
Financed by
Capital at Start $ 170.00
Net Profit $ 208.08
$ 378.08
21
SWEET TREATS TRIAL BALANCE
DR CR
Cash $ 263.08
Bank $ 125.00
Sales $ 981.50
Purchases $ 517.67
Returns Out $ 5.00
Capital $ 170.00
Wages $ 200.00
Departmental Expenses $ 40.00
General Expenses $ 10.00
Returns In $ 0.75
$ 1,156.50 $ 1,156.50
DR CR
Cash $ 263.08
Bank $ 115.00
Sales $ 981.50
Purchases $ 517.67
Returns Out $ 5.00
Capital $ 170.00
Wages $ 200.00
Departmental Expenses $ 40.00
General Expenses $ 10.00
Bank Charges $ 10.00
Returns In $ 0.75
$ 1,156.50 $ 1,156.50
22
PERFORMANCE OF THE BUSINESS
HC Sweet Treats started the business with $170.00 capital. After the business transactions, we
ended with a gross profit of $468.08. After expenses of $260.00 were deducted, it resulted in a
Given the aforementioned results of the business’ trading and profit and loss accounts, we can
23
INTERPRETATION OF RESULTS
24
COMPARISONS
PURCHASES AND SALES
1000
Sales, 980.75
800
600
400 Purchases,
512.67
200
0
Purchases Sales
Series1
170
25
COMPARISON OF EXPENSES
COMPARISON OF EXPENSES
250
200
200
150
100
50
40 10 10
0
Wages Departmental General Expenses Bank Charges
Expenses
26
SUGGESTIONS/RECOMMENDATIONS
1. The Business could have invested in more stock to make a bigger profit.
2. There could have been more variety of stock to appeal to a wider target market.
3. The division of labour could have been better distributed. More buyers could have been
assigned.
27
CONCLUSION
Overall, HC Sweet Treats performed fairly well as a business even though the profit was not as
substantial as anticipated. An efficient record keeping system was in place with accurate records
of the business’ trading and profit and loss; however, this aspect could have been more organized
Finally, most of the business aims were accomplished in terms of record keeping and profit
making; therefore, HC Sweet Treats should be commended for their work and commitment to this
business initiative.
28
APPENDIX
CASH RECEIPTS
29
Credit Note
HC SWEET TREATS 22nd November 2017
Crumpton Street
St. Michael, Barbados
(246)123456
Bill To:
Kristian Best
DESCRIPTION AMOUNT
Total $ 3.25
30
Debit Note
HC Sweet Treats 22nd November 2017
Crumpton Street
St. Michael , Barbados
(246) 123456
HCSweetTreats@gmail.com
Bill To:
Kristian Best
DESCRIPTION AMOUNT
Subtotal $ 0.75
Total $ 3.00
Paid $ 0.75
31
DEPOSIT SLIP
Total $175
WITHDRAWAL SLIP
32
Purchases Invoice
Index Limited (246) 841-6220 indexltd@gmail.com
Invoice
For:
1 Sweets 1 $ 150.08
2 Sweets 1 $ 40.00
3 Sweets 1 $ 49.50
4 Sweets 1 $ 100.95
5 Sweets 1 $ 50.00
6 Sweets 1 $ 127.14
Invoice
$ 517.67
Subtotal
TOTAL $ 517.67
33
Sales
Invoice
HC Sweet Treats (246)123456 hcsweettreats@gmail.com
TOTAL $ 3.00
34