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INTRODUCTION This school based assessment is about a sole trader business and consist of all information regarding Pastries Delight. These information includes the financial records for the period ending 31st July. This SBA keeps track of all the income and expense of Pastries Delight and therefore this shows clearly the operation of the business on a daily basis.
ACKNOWLEGEMENT
The researcher would like to thank the following persons who contributed to the successful completion of this project: 1 2
Parents for their financial The subject teacher for guidance while doing the project.
Thank you `
Salina Romanchal
C0NTENT Presentation 1) (Aim) 2) Business description 3) Record kept by the business Application of principle 1) 2) 3) 4) 5) 6) 7) 8) 9)
Price list Opening entry Transactions Books of original entry Ledger s Stock valuation: FIFO Trial balance Additional information Financial statement
Conclusion,Summary,Evaluation 1) 2) 3) 4) 5) 6)
Business performance ing ratios Comparison of ratios Suggestions/Recommendation Conclusion Appendices Source Documents Graphs Pictures of product
Mark scheme
AIMS OF THE PROJECT: To understand the ing cycle more better after investigating a business. It will also help me to understand in more details how a business operates.
DESCRIPTION OF THE BUSINESS The name of the business is Pastries Delight. It is located at Rosignol Village, main road. This business deals with varieties of pastries and puddings. The products are sold at affordable prices. Pine tart $120 each, cheese roll $160 each, Black eye $140 each, and Pudding $100 each. This
business has one employee. Opening hours are from Monday to Friday (8:00 hrs.) (Sat 9:00). Pastries delight was established since on the 28th September, 2005. The ing period is from September to July. This business sells strictly on cash.
THE PERIOD UNDER REVIEW OF PASTRIES DELIGHT The period under review for pastries delight is from September 1st to 31st July,2005
RECORD KEPT BY THE BUSINESS
Books of Prime Entries General Journal Purchase Journal Purchase Return Journal
Ledgers General ledgers
Purchase ledger
Stock Valuation: First in first out Method (FIFO) Trial Balance Financial Statement Profit and Loss Balance Sheet
PRICE LIST
Product
Buying price
Selling price
Profit
Pine tart
$80
$140
$40
Cheese roll
$75
$200
$85
Black eye
$100
$160
$40
Pudding
$80
$160
$20
Red Roll
$100
$120
$20
Opening Entries FIXED ASSET
Land $800,000 Motor van $280,000 Furniture $12000 Computer $50,000
Glass case $20,000 CURRENT ASSETS Stock
8 pine tart $640 5 Cheese roll $375 4 Black eye $400 9 Pudding $720 2 Red roll $200
2335 Cash $20,000 Bank $25,000
Liabilities Creditor A.lam
Transactions of the business: 1. July 1st- Invest in business $2,500 in the bank. 2. July 2nd- Bought furniture by cheque $12,000. 3. July 3rd- Paid telephone expense $800 by cash. 4. July 7th- Sold goods on cash $280. 2 pine tart $280 5. July 8th- Paid motor van expense 600 by cash. 6. July 10th- Bought goods on cash $425. 2 black eye $200 3 cheese roll $ 225 th 7. July 12 - Paid creditor A.lam $3000 by cash. 8. July 18th- Paid staff $6000 by cash. 9. July 20th- Sold goods on cash $400 1 black eye $160 2 Red roll $240 st 10. July 21 – Paid insurance by cash $1000 11. July 22nd- Bought goods on credit from R.Rajmangal $1060. 5 Red roll $500 7 Pudding $560 th 12. July 25 - Sold goods for cash $940 5 Pudding $800 1 pine tart $140 th 13. July 28 – Banked cash $1000. 14. July 29th- Sold goods for cash $380 1 pine tart $140 2 red roll $240 15. July 31st –Return goods to R.Rajmangal $380 16. July 31st- Paid R.Rajmangal $680 by cash
PASTRIES DELIGHT CASHBOOK
DATE
DETAIL
July 1st
Bal b/f
FOLIO
CASH
BANK
DATE
DETAIL
FOLIO
$20,000
$25,000
July2nd
Furniture
GL 5
$2500
3rd
telephone
GL 11
$800
CASH
$12,000
Capital
GL 7
7th
Sales
GL 10
$280
8th
Motor van
GL1
$1000
20th
Sales
GL 10
$400
10th
Purchase
GL 8
$425
25th
Sales
GL 10
$940
12th
A.Lam
PL 1
$3000
28th
Cash
C
18th
Staff
GL 12
$6000
29th
Sales
GL 1O
21st
Insurance
GL 13
$1000
28th
Bank
CB
$1000
31st
R.Rajmangal
PL 2
$680
$1000 $380
Bal c/d Bal b\f
$22,000
$28500
$9095
$16500
$9095
$16500
$22,000
$28500
PASTRIES DELIGHT GENERAL JOURNAL
DATE July 1
DETAIL
Motor van
FOLIO GL 1
DEBIT
$280,000
BANK
CREDIT
July 1
Land
GL 2
$800,000
July 1
Computer
GL 3
$50,000
July 1
Glass case
GL 4
$20,000
July 1 July 1
GL 5 GL 6
July 1
Furniture Stock Cash at hand
CB
$12,000 $2335 $20,000
July 1
Cash at bank
CB
$25,000
July 1
A.Lam
Pl 1
$38,000
Capital (Bal Fig)
Gl 7
$1171335
Recording of opening entries
1209335
1209335
Assets, capital and liabilities
PURCHASE JOURNAL
DATE
DETAIL
FOLIO
INVOICE #
AMOUNT $
July 22nd
R.Rajmangal Transfer to the purchase
PL 1
4444
$1060
GL 8
in the Gl 1 in the general ledger
PURCHASE RETURN JOURNAL
DATE
July 22nd
DETAIL
FOLIO
R.Rajmangal
PL 1
INVOICE #
3333
AMOUNT $
$380
transfer to the purchase return in the
GL 9
General ledger
SALES LEDGER
DR
A.Lam A/c
CR
July 12th
Cash
July 31st
Bal c/f
$3000
July 31st Bal b/f
$ 35,000 $38,000
$38,000 Aug1st
DR
$38000
Bal b/f
R.RAJMANGAL A/C
July 31st
Return outward
$380
July 31st
Cash
$680
July 22nd
$1060
$35000
CR purchase
$1060
$1060
GENERAL LEDGER
DR
CAPITAL A/C
CR
July 31st Bal c/f
$1173835
July 1st Bal B/f
$1171335
July 1st Bank
$2500
$1173835
$1173835
Aug 1st Bal b/f
DR
CASH A/C
$1173835
CR
July 1st
Bal b/f
July 7th
Sales
July 20th
Sales
$400
July10th Purchase
$425
July 25th
Sales
$940
July 12th A.lam
$3000
July 29th
Sales
$380
July 21st insurance
$20,000 $280
July 3rd Telephone
$800
July 8thMotor van expense
$600
July 28th Bank
$1000
July 31st R.Rajmangal
$680
July 31st Bal c/f $22000 Aug 1st bal b/f
$1000
$144495 $22000
$144495
BANK A/C July 1st Bal b/f July 1st
Capital
$20,000 $2500
July 2nd Furniture July 31st Bal c/f
$12,000 $16,500
July 21st Cash
$1000 $28500
Aug 1st Bal b/f
$28500
$16500
FURNITURE A/C July 1st Bal b/f
$12,000
July 2nd Bank
$12,000
July 31st Bal c/f
$24,000 Aug 1st Bal b/f
$24,000
$24,000
$24,000
TELEPHONE A/C July 3rd Aug 1st
Cash Bal b/f
$800
July 31st Bal c/f
$800
$800
MOTOR VAN EXPENSE A/C July 8th
Cash
$600
Aug 1st
Bal b/f
$600
July 31st Bal c/f
$600
SALES A/C July 31st
Bal c/f
$2000
July 7th Cash
$280
July 20th Cash
$400
July 25th Cash
$940
July 29th Cash $2000
$380 $2000
Aug 1st Bal b/f
$2000
PURCHASE A/c July 10th Cash
$425
July 22nd R.Rajmangal
$1060
July 31st Bal c/f
$1485 Aug 1st Bal b/f
$1485
$1485
$1485
INSURANCE A/C July 21st
Cash
$1000
Aug 1st
Bal b/f
$1000
July 31st Bal c/f
$1000
RETURN OUTWARD A/C July 31st
Bal c/f
$380
July 31st R.Rajmangal
$380
Aug 1st Bal b/f
$380
STOCK A/C July 1st
Bal B/f
$2335
Aug 1st
Bal b/f
$2335
July 31st C/F
$2335
GLASS CASE A/C July 1st Bal b/f
$20,000
Aug 1st Bal b/f
$20,000
July 31st Bal C/f
$20,000
MOTOR VAN A/C July 1st Bal B/f
$280,000
Aug 1st Bal b/f
$280,000
July 31st Bal C/f
$280,000
LAND A/C July 1st Bal B/f
$800,000
Aug 1st Bal b/f
$800,000
July 31st Bal c/f
$800,000
COMPUTER A/C July 1st Bal B/f
$50,000
Aug 1st Bal b/f
July 31st Bal C/f
$50,000
$50,000
PASTRIES DELIGHT TRIAL BALANCE DETAIL
DEBIT $
CREDIT $
Cash
14,495
Bank
16,500
Furniture
24,000
Telephone
800
Motor van expense
600
Insurance
1000
Sale
2000
Purchase
1485
A.lam Return outward Stock Glass case
35,000 380 2335 20,000
Land
800,000
Computer Motor van Capital
50,000 280,000 1173835
1211215
1211215
STOCK VALUATION FIFO ( PINE TART ) DATE
RECEIVED
ISSUED
BALANCE 8@80= $640
July 7th
2@140
6@80=$480
July 25th
1@140
5@80=$400
July 29th
1@140
4@80=$320
CHEESEROLL DATE July 10th
RECEIVED
ISSUED
3@75
BALANCE 5 @ 75 = $375 5 @ 75= $575 3 @ 75= $225 $600
BLACK EYE DATE July 10th
RECEIVED
ISSUED
2 @100
BALANCE 4@100=400 4@ 100=400 2@100=200
1 @ 160
3@100=300 2@100=200 500
PUDDING
DATE July 22nd
RECEIVED
ISSUED
7@80
BALANCE 9@80=720 9@80=720 7@80=560
July 25th
5@160 1@80 RETURNED
4@80=320 7@80=560 3@80=240 7@80=560
REDROLL DATE
RECEIVED
ISSUED
BALANCE 2@100=200
2@120 5@100
5@100=500 2@120 3@100
3@100=300 =0
RETURNED
Pastries Delight Trading and Profit and Loss for the month ended 31st july
Sales
2000
Less: Cost of goods sold Opening stock Purchase
2335 1485
Less: Return outward
(380)
1105 3440 (2640)
Less: Closing stock Gross profit
(800) 1200
Less: Expense Telephone expense Motor van expense Insurance (1000-600) Dep: motor van
800 600 400 1167
(2967) -1767
Net loss
Pastries Delight Balance Sheet As At 31st July,2005
Fixed Assets:
COST
Land Computer Furniture Motor van Glass case
280,000
ACC DEP
1167
NBV 800,000 50,000 24,000 278,833 20,000 1172833
Current Assets: Stock Prepayment Bank Cash
2640 600 16500 14495 34235
Less: Current Liabilities Creditors Working capital
(35000)
Financed by: Capital Less: Net Loss
-765 1172068 1173835 (-1767) 1172068
PERFORMANCE OF BUSINESS
Pastries delight is an unsuccessful business resulting a loss of $1767. The loss could be ed for in the following reasons. Firstly the business encountered the excess amount of expenses. Secondly, the item Pastries Delight sold were given too little amount of profit to be attached to their prices; lastly the business did not uncounted with any additional income other than sales eg. Discount received, commission received, etc. Although the business had a poor financial performance, it’s financial position seems well with its assets. As from the following asset valued at $1172833, land, computer, furniture, motor van and glass case. The business further own additional assets which are current assets valued $34235, which are current assets valued $34235, stock, prepayment, bank and cash. On the other hand the business owes creditors, $35,000 resulting a working capital of $-765. The business opening capital was $1173835 but due to a net loss rhe closing capital is now 1172068
ING RATIOS
1. 2. 3. 4.
Acid test ratio/quick ratio Working capital/current ratio Gross profit margin Stock turn
Definition, formula and explanation of ing ratios: 1. Acid test ratio/quick ratio The acid test ratio removes stock from the current ratio, recognizing that it may be hard yo turn stock into cash quickly because stock is less liquid than the other current assets this current asset helps assess the overall risk of a company Formula for Acid test ratio/quick ratio= current assets-stock / current liabilities = 34235-2640 / 35000 = 31595 / 35000 = 0.90 This current assets for the business is $34235 and stock is $2640 and current liabilities is 35000. The firm is not in a good position of liquidity which means the business does not have the ability to pay it’s debts due.
2) Working capital/current ratio The working capital/current ratio of a business measures the financial strength and operational comfort of the business. Formula for working capital/current ratio: current assets / current liabilities = 34235/ 35000
= 0.9781 The total current assets are $34235 and current liabilities are 35000. The current ratio is 0.98, this indicates that the current assets cannot pay for the current liabilities which is not good for the business. Gross profit margin This ratio measures what proportion of each dollars is to be considered profit. This ratio restates the relationship of gross profit to sales as a percentage. Formula for gross profit margin = gross profit \ sales x 100 = 1200 \ 2000 x 100 = 60%
4) Stock turn This ratio checks how quickly the business has turned over it’s stock. Formula for stock turn= 800 / 2487.5 = 0.3216 Average stock = opening stock + closing stock / 2 = 4975 / 2 = 2487.5 This ratio shows how many times the stocks was sold out. According to the results the stock was turned or sold out 0.3216 times.
Comparison of Data The opening capital was 1171335 and the working capital is 1172068. The opening capital is higher than the working capital which indicates clearly that the business had a loss or poor business income.
Graphs showing comparison of Data
Graph showing opening cash/ closing cash 2
1
2100
2200
2300
2400
2500
2600
2700
Graph showing opening cash/closing cash
2
1
0
5000
10000
15000
20000
25000
Suggestions and Recommendation Two suggestions and recommendations I would implement in my business are to increase the price of the products in order to make profit. Secondly, is to reduce the expenses of the business and arrange for more income of the business.
Conclusion In conclusion, the researcher can definitely relate that the aims of the business were achieved ie, the researcher understood the entire ing cycle by investigating pastries delight and secondly the researcher obtain better information and details on how the business operates.
Bibliography
1) Principle of s for the Caribbean 4th Edition Frank Wood and Sheila Robinson
2) Principle of s for Csec examination Gaynelle D. Holdip and Cecelia Lamorell
APPENDICES Bank Document
Cash Receipt
Purchase Invoice
R.Rajmangal ltd
NO.A
123 Lot 12 Section C D' Edward Village
To: Pastries Delight
Date: Order No: Deliver ed:
Main Road Rosignol village (WBB) QUANTITY
DESCRIPTION
CAT.NO
UNIT PRICE
TOTAL
credit note
Pictures of product (pastries)
Cheese roll
Black eye
ACKNOWLEGEMENT
The researcher would like to thank the following persons who contributed to the successful completion of this project: 1 2
Parents for their financial The subject teacher for guidance while doing the project.
Thank you `
Salina Romanchal
C0NTENT Presentation 1) (Aim) 2) Business description 3) Record kept by the business Application of principle 1) 2) 3) 4) 5) 6) 7) 8) 9)
Price list Opening entry Transactions Books of original entry Ledger s Stock valuation: FIFO Trial balance Additional information Financial statement
Conclusion,Summary,Evaluation 1) 2) 3) 4) 5) 6)
Business performance ing ratios Comparison of ratios Suggestions/Recommendation Conclusion Appendices Source Documents Graphs Pictures of product
Mark scheme
AIMS OF THE PROJECT: To understand the ing cycle more better after investigating a business. It will also help me to understand in more details how a business operates.
DESCRIPTION OF THE BUSINESS The name of the business is Pastries Delight. It is located at Rosignol Village, main road. This business deals with varieties of pastries and puddings. The products are sold at affordable prices. Pine tart $120 each, cheese roll $160 each, Black eye $140 each, and Pudding $100 each. This
business has one employee. Opening hours are from Monday to Friday (8:00 hrs.) (Sat 9:00). Pastries delight was established since on the 28th September, 2005. The ing period is from September to July. This business sells strictly on cash.
THE PERIOD UNDER REVIEW OF PASTRIES DELIGHT The period under review for pastries delight is from September 1st to 31st July,2005
RECORD KEPT BY THE BUSINESS
Books of Prime Entries General Journal Purchase Journal Purchase Return Journal
Ledgers General ledgers
Purchase ledger
Stock Valuation: First in first out Method (FIFO) Trial Balance Financial Statement Profit and Loss Balance Sheet
PRICE LIST
Product
Buying price
Selling price
Profit
Pine tart
$80
$140
$40
Cheese roll
$75
$200
$85
Black eye
$100
$160
$40
Pudding
$80
$160
$20
Red Roll
$100
$120
$20
Opening Entries FIXED ASSET
Land $800,000 Motor van $280,000 Furniture $12000 Computer $50,000
Glass case $20,000 CURRENT ASSETS Stock
8 pine tart $640 5 Cheese roll $375 4 Black eye $400 9 Pudding $720 2 Red roll $200
2335 Cash $20,000 Bank $25,000
Liabilities Creditor A.lam
Transactions of the business: 1. July 1st- Invest in business $2,500 in the bank. 2. July 2nd- Bought furniture by cheque $12,000. 3. July 3rd- Paid telephone expense $800 by cash. 4. July 7th- Sold goods on cash $280. 2 pine tart $280 5. July 8th- Paid motor van expense 600 by cash. 6. July 10th- Bought goods on cash $425. 2 black eye $200 3 cheese roll $ 225 th 7. July 12 - Paid creditor A.lam $3000 by cash. 8. July 18th- Paid staff $6000 by cash. 9. July 20th- Sold goods on cash $400 1 black eye $160 2 Red roll $240 st 10. July 21 – Paid insurance by cash $1000 11. July 22nd- Bought goods on credit from R.Rajmangal $1060. 5 Red roll $500 7 Pudding $560 th 12. July 25 - Sold goods for cash $940 5 Pudding $800 1 pine tart $140 th 13. July 28 – Banked cash $1000. 14. July 29th- Sold goods for cash $380 1 pine tart $140 2 red roll $240 15. July 31st –Return goods to R.Rajmangal $380 16. July 31st- Paid R.Rajmangal $680 by cash
PASTRIES DELIGHT CASHBOOK
DATE
DETAIL
July 1st
Bal b/f
FOLIO
CASH
BANK
DATE
DETAIL
FOLIO
$20,000
$25,000
July2nd
Furniture
GL 5
$2500
3rd
telephone
GL 11
$800
CASH
$12,000
Capital
GL 7
7th
Sales
GL 10
$280
8th
Motor van
GL1
$1000
20th
Sales
GL 10
$400
10th
Purchase
GL 8
$425
25th
Sales
GL 10
$940
12th
A.Lam
PL 1
$3000
28th
Cash
C
18th
Staff
GL 12
$6000
29th
Sales
GL 1O
21st
Insurance
GL 13
$1000
28th
Bank
CB
$1000
31st
R.Rajmangal
PL 2
$680
$1000 $380
Bal c/d Bal b\f
$22,000
$28500
$9095
$16500
$9095
$16500
$22,000
$28500
PASTRIES DELIGHT GENERAL JOURNAL
DATE July 1
DETAIL
Motor van
FOLIO GL 1
DEBIT
$280,000
BANK
CREDIT
July 1
Land
GL 2
$800,000
July 1
Computer
GL 3
$50,000
July 1
Glass case
GL 4
$20,000
July 1 July 1
GL 5 GL 6
July 1
Furniture Stock Cash at hand
CB
$12,000 $2335 $20,000
July 1
Cash at bank
CB
$25,000
July 1
A.Lam
Pl 1
$38,000
Capital (Bal Fig)
Gl 7
$1171335
Recording of opening entries
1209335
1209335
Assets, capital and liabilities
PURCHASE JOURNAL
DATE
DETAIL
FOLIO
INVOICE #
AMOUNT $
July 22nd
R.Rajmangal Transfer to the purchase
PL 1
4444
$1060
GL 8
in the Gl 1 in the general ledger
PURCHASE RETURN JOURNAL
DATE
July 22nd
DETAIL
FOLIO
R.Rajmangal
PL 1
INVOICE #
3333
AMOUNT $
$380
transfer to the purchase return in the
GL 9
General ledger
SALES LEDGER
DR
A.Lam A/c
CR
July 12th
Cash
July 31st
Bal c/f
$3000
July 31st Bal b/f
$ 35,000 $38,000
$38,000 Aug1st
DR
$38000
Bal b/f
R.RAJMANGAL A/C
July 31st
Return outward
$380
July 31st
Cash
$680
July 22nd
$1060
$35000
CR purchase
$1060
$1060
GENERAL LEDGER
DR
CAPITAL A/C
CR
July 31st Bal c/f
$1173835
July 1st Bal B/f
$1171335
July 1st Bank
$2500
$1173835
$1173835
Aug 1st Bal b/f
DR
CASH A/C
$1173835
CR
July 1st
Bal b/f
July 7th
Sales
July 20th
Sales
$400
July10th Purchase
$425
July 25th
Sales
$940
July 12th A.lam
$3000
July 29th
Sales
$380
July 21st insurance
$20,000 $280
July 3rd Telephone
$800
July 8thMotor van expense
$600
July 28th Bank
$1000
July 31st R.Rajmangal
$680
July 31st Bal c/f $22000 Aug 1st bal b/f
$1000
$144495 $22000
$144495
BANK A/C July 1st Bal b/f July 1st
Capital
$20,000 $2500
July 2nd Furniture July 31st Bal c/f
$12,000 $16,500
July 21st Cash
$1000 $28500
Aug 1st Bal b/f
$28500
$16500
FURNITURE A/C July 1st Bal b/f
$12,000
July 2nd Bank
$12,000
July 31st Bal c/f
$24,000 Aug 1st Bal b/f
$24,000
$24,000
$24,000
TELEPHONE A/C July 3rd Aug 1st
Cash Bal b/f
$800
July 31st Bal c/f
$800
$800
MOTOR VAN EXPENSE A/C July 8th
Cash
$600
Aug 1st
Bal b/f
$600
July 31st Bal c/f
$600
SALES A/C July 31st
Bal c/f
$2000
July 7th Cash
$280
July 20th Cash
$400
July 25th Cash
$940
July 29th Cash $2000
$380 $2000
Aug 1st Bal b/f
$2000
PURCHASE A/c July 10th Cash
$425
July 22nd R.Rajmangal
$1060
July 31st Bal c/f
$1485 Aug 1st Bal b/f
$1485
$1485
$1485
INSURANCE A/C July 21st
Cash
$1000
Aug 1st
Bal b/f
$1000
July 31st Bal c/f
$1000
RETURN OUTWARD A/C July 31st
Bal c/f
$380
July 31st R.Rajmangal
$380
Aug 1st Bal b/f
$380
STOCK A/C July 1st
Bal B/f
$2335
Aug 1st
Bal b/f
$2335
July 31st C/F
$2335
GLASS CASE A/C July 1st Bal b/f
$20,000
Aug 1st Bal b/f
$20,000
July 31st Bal C/f
$20,000
MOTOR VAN A/C July 1st Bal B/f
$280,000
Aug 1st Bal b/f
$280,000
July 31st Bal C/f
$280,000
LAND A/C July 1st Bal B/f
$800,000
Aug 1st Bal b/f
$800,000
July 31st Bal c/f
$800,000
COMPUTER A/C July 1st Bal B/f
$50,000
Aug 1st Bal b/f
July 31st Bal C/f
$50,000
$50,000
PASTRIES DELIGHT TRIAL BALANCE DETAIL
DEBIT $
CREDIT $
Cash
14,495
Bank
16,500
Furniture
24,000
Telephone
800
Motor van expense
600
Insurance
1000
Sale
2000
Purchase
1485
A.lam Return outward Stock Glass case
35,000 380 2335 20,000
Land
800,000
Computer Motor van Capital
50,000 280,000 1173835
1211215
1211215
STOCK VALUATION FIFO ( PINE TART ) DATE
RECEIVED
ISSUED
BALANCE 8@80= $640
July 7th
2@140
6@80=$480
July 25th
1@140
5@80=$400
July 29th
1@140
4@80=$320
CHEESEROLL DATE July 10th
RECEIVED
ISSUED
3@75
BALANCE 5 @ 75 = $375 5 @ 75= $575 3 @ 75= $225 $600
BLACK EYE DATE July 10th
RECEIVED
ISSUED
2 @100
BALANCE 4@100=400 4@ 100=400 2@100=200
1 @ 160
3@100=300 2@100=200 500
PUDDING
DATE July 22nd
RECEIVED
ISSUED
7@80
BALANCE 9@80=720 9@80=720 7@80=560
July 25th
5@160 1@80 RETURNED
4@80=320 7@80=560 3@80=240 7@80=560
REDROLL DATE
RECEIVED
ISSUED
BALANCE 2@100=200
2@120 5@100
5@100=500 2@120 3@100
3@100=300 =0
RETURNED
Pastries Delight Trading and Profit and Loss for the month ended 31st july
Sales
2000
Less: Cost of goods sold Opening stock Purchase
2335 1485
Less: Return outward
(380)
1105 3440 (2640)
Less: Closing stock Gross profit
(800) 1200
Less: Expense Telephone expense Motor van expense Insurance (1000-600) Dep: motor van
800 600 400 1167
(2967) -1767
Net loss
Pastries Delight Balance Sheet As At 31st July,2005
Fixed Assets:
COST
Land Computer Furniture Motor van Glass case
280,000
ACC DEP
1167
NBV 800,000 50,000 24,000 278,833 20,000 1172833
Current Assets: Stock Prepayment Bank Cash
2640 600 16500 14495 34235
Less: Current Liabilities Creditors Working capital
(35000)
Financed by: Capital Less: Net Loss
-765 1172068 1173835 (-1767) 1172068
PERFORMANCE OF BUSINESS
Pastries delight is an unsuccessful business resulting a loss of $1767. The loss could be ed for in the following reasons. Firstly the business encountered the excess amount of expenses. Secondly, the item Pastries Delight sold were given too little amount of profit to be attached to their prices; lastly the business did not uncounted with any additional income other than sales eg. Discount received, commission received, etc. Although the business had a poor financial performance, it’s financial position seems well with its assets. As from the following asset valued at $1172833, land, computer, furniture, motor van and glass case. The business further own additional assets which are current assets valued $34235, which are current assets valued $34235, stock, prepayment, bank and cash. On the other hand the business owes creditors, $35,000 resulting a working capital of $-765. The business opening capital was $1173835 but due to a net loss rhe closing capital is now 1172068
ING RATIOS
1. 2. 3. 4.
Acid test ratio/quick ratio Working capital/current ratio Gross profit margin Stock turn
Definition, formula and explanation of ing ratios: 1. Acid test ratio/quick ratio The acid test ratio removes stock from the current ratio, recognizing that it may be hard yo turn stock into cash quickly because stock is less liquid than the other current assets this current asset helps assess the overall risk of a company Formula for Acid test ratio/quick ratio= current assets-stock / current liabilities = 34235-2640 / 35000 = 31595 / 35000 = 0.90 This current assets for the business is $34235 and stock is $2640 and current liabilities is 35000. The firm is not in a good position of liquidity which means the business does not have the ability to pay it’s debts due.
2) Working capital/current ratio The working capital/current ratio of a business measures the financial strength and operational comfort of the business. Formula for working capital/current ratio: current assets / current liabilities = 34235/ 35000
= 0.9781 The total current assets are $34235 and current liabilities are 35000. The current ratio is 0.98, this indicates that the current assets cannot pay for the current liabilities which is not good for the business. Gross profit margin This ratio measures what proportion of each dollars is to be considered profit. This ratio restates the relationship of gross profit to sales as a percentage. Formula for gross profit margin = gross profit \ sales x 100 = 1200 \ 2000 x 100 = 60%
4) Stock turn This ratio checks how quickly the business has turned over it’s stock. Formula for stock turn= 800 / 2487.5 = 0.3216 Average stock = opening stock + closing stock / 2 = 4975 / 2 = 2487.5 This ratio shows how many times the stocks was sold out. According to the results the stock was turned or sold out 0.3216 times.
Comparison of Data The opening capital was 1171335 and the working capital is 1172068. The opening capital is higher than the working capital which indicates clearly that the business had a loss or poor business income.
Graphs showing comparison of Data
Graph showing opening cash/ closing cash 2
1
2100
2200
2300
2400
2500
2600
2700
Graph showing opening cash/closing cash
2
1
0
5000
10000
15000
20000
25000
Suggestions and Recommendation Two suggestions and recommendations I would implement in my business are to increase the price of the products in order to make profit. Secondly, is to reduce the expenses of the business and arrange for more income of the business.
Conclusion In conclusion, the researcher can definitely relate that the aims of the business were achieved ie, the researcher understood the entire ing cycle by investigating pastries delight and secondly the researcher obtain better information and details on how the business operates.
Bibliography
1) Principle of s for the Caribbean 4th Edition Frank Wood and Sheila Robinson
2) Principle of s for Csec examination Gaynelle D. Holdip and Cecelia Lamorell
APPENDICES Bank Document
Cash Receipt
Purchase Invoice
R.Rajmangal ltd
NO.A
123 Lot 12 Section C D' Edward Village
To: Pastries Delight
Date: Order No: Deliver ed:
Main Road Rosignol village (WBB) QUANTITY
DESCRIPTION
CAT.NO
UNIT PRICE
TOTAL
credit note
Pictures of product (pastries)
Cheese roll
Black eye
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