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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 support


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 accounts
Stock valuation: FIFO
Trial balance
Additional information
Financial statement

Conclusion,Summary,Evaluation
1)
2)
3)
4)
5)
6)

Business performance
Accounting ratios
Comparison of ratios
Suggestions/Recommendation
Conclusion
Appendices
Source Documents
Graphs
Pictures of product

Mark scheme

AIMS OF THE PROJECT:


To understand the accounting 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 accounting 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 account
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

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

Account 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
account 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 Account 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
accounted 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, its 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

ACCOUNTING RATIOS

1.
2.
3.
4.

Acid test ratio/quick ratio


Working capital/current ratio
Gross profit margin
Stock turn

Definition, formula and explanation of accounting 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 its 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 its 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

2100

2200

2300

2400

2500

2600

2700

Graph showing opening cash/closing cash

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 accounting cycle by investigating pastries delight and
secondly the researcher obtain better information and details on how the business operates.

Bibliography

1) Principle of Accounts for the Caribbean 4th Edition


Frank Wood and Sheila Robinson

2) Principle of Accounts 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