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JENS SUPERMARKET

CXC Principles of Accounts


General Level
SBA Assignment
Summer 2010

Name: Jenevonne Kirton

Registration number:

School: The Lodge School

School code: 030016

Territory: Barbados

This project is about develop and promising entity, Jens


Supermarket, under review for December 2009
pg. 1
Table of Contents

Opening
remarks
...3-6
Acknowledgement..
....3
Aim of
project
..4 Description and
overview..
.5- 6
Accounting procedures used and records kept:
...........7
Opening journal entries..
.8
The General
Journal......9
Sales Journal...
...15
Purchases Journal...
......15
Return Inwards
Journal...16
Return Outwards Journal.
.....16
Three Column Cash
Book...17
Sales
Ledger
....18-19
Purchases ledger...
..20
General Ledgers..
....21-23
The Trial Balance..
...24
Trading and Profit and Loss..
...25
Balance Sheet..
.....26

pg. 2
Performance Evaluation and interpretation of
results......27-29
Ratios
...27-29
Comparison..
.....30
Suggestion..
..31
Conclusion
...32
Appendices:
The List of the
Transactions....10-
11
Source
documents..
.12-14
The accounting
cycle....7
Pie charts ..
..28
Doughnut
chart.
..29

Acknowledgement

pg. 3
I would like to thank family and friends for all they

contributed towards taking Jens Supermarket from an idea and

making it into an innovation. Thank you to all who contributed

money or any fixed assets into the entity to make Jens

Supermarket a success.

Aim of the Project

pg. 4
The 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

2009 for Jens Supermarket and to comment on the entitys

performance using appropriate tools of Analysis

Description and Overview


pg. 5
Jens Supermarket is a developed and simulated entity

owned by Jenevonne Kirton, who is the sole proprietor. Jens

Supermarket is a developed supermarket which sells a variety of

food items and miscellaneous goods, serving most of the island

in its convenient location.

The supermarket employ fifteen staff along with Ms. Kirton

acting as owner/manager. There are three supervisors and

twelve general workers who act as shelf stackers, cashiers, as

assistance and security

The lines of authority within the business a shown below

Owner/Manager

pg. 6
Supervisor Supervisor
Supervisor

General Workers

The accounting records are kept on double entry principles, with

all the necessary journals, ledgers, a cash book, a petty cash

book and a payroll to record the cash and credit transactions of

the entity. Jens Supermarket allows some of their costumers to

buy on credit and they also buy from many retailers on credit.

The period under review is Dec 2009

Accounting procedures used and records

kept

pg. 7
Jens Supermarket keeps records according to the standard form

of double entry principles and in keeping with the accounting

cycle shown below.

The accounting Cycle

1.
Journalising/
Books of
original
entry

5. Final 2. Posting
Accounts to the ledger

4.Adjustmen
ts and 3.Trial
closing Balance
entries

pg. 8
Opening Journal Entries

Assets

Cash 1000
Bank 50000
Premises 100000
Motor Van 1500
Stock 50000

Debtors

C. Harris 1000
S. Clarke 5000
T. Thomas 300

Creditors

M. Song 5000
D. Call 1000

pg. 9
The General Journal

The General Journal p.5


Date Details Folio Debit Credit
2009 Assets
Gl
1st Jan Premises 64 100000
Gl
Motor Van 63 1500
Gl
Stock 55 50000

Debtors:
Sl
C. Harris 44 1000
Sl
S. Clarke 42 5000
Sl
T. Thomas 50 300

CB
Bank 10 50000
CB
Cash 10 1000

Liabilities:
Creditors
M. Song 5000
P. Call 1000
Capital 202800
208800 208800

pg. 10
List of Transactions

December 2009

Dec 1. Purchased goods on credit from U. Ulrich $50,000

2. Sold goods on credit to H. Hoyte costing 600

3. Cash Sales $100,000

4. Cash Drawings $1,000

5. Paid Rent and Rates by cheque $1,000

6. Credit Sales to M. Lung $450

9. H. Hung lent us $600 by cheque

12. M. Lung paid us by cheque $450

13. Repaid H. Hung $600 by cheque

14. Sold goods on credit to F. Frank $2000

15. Bought goods from R. Reid 1500

16. Paid insurance by cheque for $300

17. Paid wages by cheque $1,000

19. Paid for motor expenses $300 by cash

21. Sales on credit to G. Gooding $2,000

22. Goods returned from F. Frank $200

pg. 11
24. Returned faulty stock to U. Ulrich $100

26. Credit purchases from M. Thomas $ 1000

28. Bought goods from I. Irish for $45

29. Paid R. Reid his account by cheque having a discount of


5%

30. H. Hoyte paid his account by cheque having a discount of


5%

Invoice

Invoice
no: 001
Date: 14th/12/2009
From: Jen's To: Frank
Supermarket Turning
Haggat Hall St.

pg. 12
St.Michael Michael

UNIT
QTY DESCRIPTION PRICE($) $
25
Cases PHD: Milk 40 1000
10 Sun flower:
crates Eggs 15 150
50 Pampers:
boxes Pampers 17 850

Total 2000

Debit Note:

DEBIT NOTE

Jen's From
To: Supermarket : U. Ulrich
Haggat Hall Hinds Bury
St. Michael. St. James
Barbados Barbados

Date Ref
: 24th December 2009 No: Invoice No:005

UNIT PRICE TOTAL


QTY DESCRIPTION ($) AMOUNT($)
5
case BBC: Pep
s drinks 20 100

Credit Note:

Credit
Note
pg. 13
Jen's
From: Supermarket To: F. Frank
Haggat Hall, Turning ,
St. Michael, St. Michael,
Barbados. Barbados.

Ref Invoice
Date: 22nd December 2009 No: No:010
Date 22nd Dec,
d 2009

UNIT TOTAL
QTY DESCRIPTION PRICE ($) AMOUNT($)
5 buckets( 1 Bico: Ice
Gallon each) Cream 40 200

Recei
pt:

Receipt
Date:30th Dec
2009 # 001

Received from: H. Hoyte

Five hundred and forty


the sum of dollars

wholesale
For: goods
$540.00
Per: H. Hoyte

Cheque:

pg. 14
Barbados National
J
Bank 312086
2009/12/1
e BRIDGETOWN, ST. MICHAEL 3
n YR/MO/DA

BARBADOS. Y

s
pay to the
Super $
order of H. Hung bds 600.00
Market Six
hundred--------------------- DOLLA
-- RS

Jks
Jenevonne Kirton
Owner/General
BNB ACCOUNT Manager

The Sales Journal


pg. 15
Sales Journal
p.17
Invoice Amou
Date Details No Folio nt
2009 $
2nd
Dec H. Hoyte 001 SL 3 2000
6th
Dec M. Lung 002 SL 4 2000
14th
Dec F. Frank 003 SL 2 600
21st
Dec G. Gooding 004 SL 1 450
Transferred to GL
sales a/c 21 5050

The Purchases Journal

Purchases Journal
p.5
Invoice Foli Amou
Date Details No o nt
2009 $
PL 5000
1st Dec U. Ulrich 001 5 0
15th PL
Dec R. Reid 004 7 1500
26th PL
Dec M. Thomas 002 1 1000
28th PL
Dec I. Irish 003 2 45

Transferred to
purchases a/c GL3 52545

pg. 16
The Return Inwards Journal

Return Inwards Journal


p.12
Invoice Foli Amou
Date Details No o nt
2009 $
22nd SL
Dec F. Frank 004 3 200
Transferred to Return GL
Inwards a/c 21

The Return Outwards Journal

Return Outwards Journal


p.10
Invoice Foli Amou
Date Details No o nt
2009 $
24tn PL
Dec U. Ulrich 001 5 100
Transferred to return GL
outwards a/c 23

pg. 17
The Cash Book

Jen's Supermarket
Three column Cash Book (p.10)
Dat Dat
e Details Folio Dis Cash Bank e Details Folio Dis Cash Bank
200
2009 9
Dec $ $ $ Dec $ $ $
1st bal b/d GJ 1 1000 50000 4th Drawings GL 12 1000
GL 1000 Rent and
3rd Sales 10 00 5th Rates GL 14 1000
GL 16t
9th loan 16 600 h Insurance GL 17 300
12t M. 17t
h Lung SL 1 450 h Wages GL 18 5000
30t H. 19t Motor
h Hoyte SL 7 60 540 h expenses GL 20 300
29t
h R. Reid PL 7 75 1425
31s 99
t bal c/d 700 43865
1010 1010
60 00 51590 75 00 51590
1st GL 9970 GL
Jan 40 0 43865 39

pg. 18
Sales Ledgers
C. Harris p.44
2009
1st 100
Dec bal b/d GJ 1 0

S. Clarke p.22
2009
1st 500
Dec bal b/d GJ 1 0

T. Thomas p.11
2009
1st
Dec bal b/d GJ 1 300

F. Frank p.3
2009 2009
14th 200 22nd Return
Dec Sales SJ 17 0 Dec Inwards RIJ 12 200
31st Dec bal c/d 1800
200
0 2000
1st 180
Jan bal b/d 0

G. Gooding p.4
2009
21st 200
Dec Sales SJ 17 0

pg. 19
H. Hoyte p.7
2009 2009
2nd
Dec Sales SJ 17 600 30th Dec Bank CB 10 540
30th Dec Dis CB 10 60
600 600

M Lung p.1
2009 2009
6th Dec Sales SJ 17 450 12th Dec Bank CB 10 450

N.B Debtors=10100

pg. 20
Purchases Ledger
U. Ulrich p.5
2009 2009
24th Return ROH 2nd Purchas
Dec Outwards 10 100 Dec es PJ 5 50000
31st 4990
Dec bal c/d 0
5000
0 50000
1st Jan bal b/d 50000

D. Call p.50
1st Dec bal b/d GJ 1 1000

M. Thomas p.1
26th Purchas
Dec es PJ 5 1000

I.
Irish p.2
2009
28th Purchas
Dec es PJ 5 45

R.
Reid p.7
2009 2009
29th 15th Purchas
Dec Bank CB 10 1425 Dec es PJ 5 1500
29th
Dec Dis CB 10 75
1500 1500

pg. 21
N.B Creditors=56945

General Ledgers

Premises p.31
2009
1st 1000
Dec bal b/d Gl 42 00

Motor Van p.32


2009
1st
Dec bal b/d Gl 41 1500

Sales p.10
2009 2009
31st Total
Dec sales SJ 17 5050
for the
month
31st 1050 3rd 10000
Dec bal c/d 50 Dec Cash CB 10 0
1050 10505
50 0
10505
1st Jan bal b/d 0

Loan p.16
2009
9th
Dec Bank CB 10 600

pg. 22
Discount
Allowed p.62
2009
30th Total
Dec discount CB 10 60
for the
month

Discount
Received p.61
2009
29th Total
Dec discount CB 10 75
for the
month

Purchases p.3
2009
31st 5254
Dec Total credit PJ 5 5
for the
month

Return
Outwards p.23
2009
31st
Dec Total Returns
for the ROJ
month 10 100

Return Inwards p.21

pg. 23
2009
31st
Dec Total Returns
for the
month RIJ 12 200

Drawings p.12
2009
4th
Dec Cash CB 10 1000

Rent and Rates p.14


2009
5th
Dec Bank Cb 10 1000

Insurance p.17
2009
16th
Dec Bank CB 10 300

Wages p.18
2009
17th
Dec Bank CB 10 5000

Motor
Expenses p.20
2009
19th
Dec Cash CB 10 300

Capital p.101

pg. 24
2009
20280
1st Dec bal b/d GJ 1 0

Stock P.55
10th 500
Dec bal b/d GJ 1 00

The Trial Balance

Jen's Supermarket
Trial Balance
as at 31st Dec 2009
Date Details Debit Credit
2009 $ $
31st 20280
Dec Capital 0
Cash 99700
Bank 43865
10000
Premises 0
Motor Van 1500
10505
Sales 0
Loan 600
Purchases 52545
Return
Outwards 100
Return Inwards 200
Drawings 1000
Rent and Rates 1000
Insurance 300

pg. 25
Wages 5000
Motor
Expenses 300
Creditors 56945
Debtors 10100
Stock 50000
Discount allowed 60
Discount
received 75
36557 36557
0 0

Adjustments

Closing Stock- $10245


Depreciation on Motor Van- 10%
Insurance owing- $50
Rent and Rates paid in advance- $50

The Trading and Profit and Loss

Jen's Supermarket
Trading and Profit and Loss
for the year ending 31st December 2009
$ $ $
Sales 105050
less Return Inwards (200)
Net Sales 104850

Add Opening Stock 50000


Purchases 52545
less Return Outwards (100)
Net Purchases 52445
Cost of goods
available for sale 102445
less closing stock (10245)
Cost of goods sold (92200)

pg. 26
Gross Profit 12650
Add Discount
Received 75
12725

Less Expenses:
Rent and Rates 500
Insurance 350
Wages 5000
Motor Expenses 300
Discount Allowed 60
Depreciation for
Motor Van 150
Total expenses (6360)
Net profit 6365

The Balance Sheet

Jen's Supermarket
Balance Sheet
as at 31st Dec 2009
Fixed Assets $ $ $
Premises 100000
Motor Van 1500
less depreciation (150) 1350
Total fixed assets 101350

Current Assets
Closing Stock 10245
Debtors 10100
Bank 43865
Cash 99700
Rent and Rates paid
in advance 500
Total current assets 164410

pg. 27
Less current liabilities
Creditors 56945
loan 600
Insurance owing 50
Total current liabilities (57595)
Working capital 106815
208165
Financed by
Capital 202800
Add Net Profit 6365
209165
Less Drawings (1000)
Capital at end 208165

Performance evaluation and interpretation


of results

In preparing the financial statements for the business Jens Supermarket,


the Trading and profit and Loss account showed a profit of ($6365) six
thousand three hundred and sixty five dollars during the month of
December in the year 2009.

In the close of the financial year for Jens Supermarket there is an increase
of capital, this indicates that the business was profitable as shown in the
following ratios.

The business was able to maximize its profitability on the Gross profit/ sales
ratio percentage and return on capital employed ratio percentage as
indicated by the following:

pg. 28
1. Gross Profit to sales
ratio.

Gross 1265
Profit = 0 = 0.1
1048
Sales 50

Gross Profit as a percentage of


sales

Gross *100 1265 *100


Profit = 0 = 12%
1048
Sales 50

Gross profit to Sales

11% Gross Profit


Sales
89%

The sales for the period under review were 104850; the cost of goods sold
was 92200. Therefore the business made a gross profit of 12 650. Overall

pg. 29
the business made ($12) twelve dollars on every ($100) hundred dollars of
sales.

2. Return on capital employed ratio

Net Profit = 6365 = 0.031


capital 205482
employed .50

Return on capital employed ratio percentage

*100 *100
Net Profit = 6365 = 3.1%
capital 205482
employed .50

pg. 30
Return on Capital Employed

3%

Net Profit
Capital Employed

97%

N.B Capital Employed= Opening Capital + Closing Capital/2

The capital at start was 202800, whilst at close it was 208 165. These
figures show an increase in the net worth of the business of 5365.

Comparison of figures at start and close


pg. 31
The comparison is being done between two liquidity ratios: the current ratio
and acid test ratio.

Current ratio

Current
Assets = 164410
Current
liabilities 57595

= 2.9:1

Acid test
ratio

Current assets- 164410-


stock = 10245
current liabilities 57595

= 154165
57595

= 2.7:1

1. The current ratio was 2.9:1 and the acid test ratio was 2.7:1.That is an
indication that when creditors are paid the remainder of cash is 1.9 and 1.7
respectively. Although stock was deducted from the current assets the
business was still able to repay its debts. This showed that the current
assets did not depend on closing stock to raise its figure.

2. The capital at beginning was 202800 while at end it was 208165 which
showed an increase by 5365 at the end of the month.

pg. 32
Suggestions/Recommendations

Current Ratio

It is recommended that Jens Supermarket

1. Uses the excess money to expand the business by opening


another supermarket.
2. Introduce new product to the business and purchase new
equipment.

Gross Profit

It is suggested that Jens Supermarket should

1. Source cheaper suppliers to facilitate the demand of goods


so profitability would be greater at the end of the month.
2. Offer new promotions every week and offer the customers
raffles at a chance to win prizes at the end of the year.

These are given to help Jens Supermarket increase gross profit


and sales.

pg. 33
Conclusion

It is clear that Jens Supermarket keeps adequate records


for the business to demonstrate the profitability over the
financial period for the month. It could however, increase the
current ratio and gross profit by incorporating the
suggestions/recommendations outlined.

Nevertheless Jens Supermarket made a good net profit for


the month of December in 2009.Overall based on the
performance of the business Jens Supermarket was able to
make a profit of 6365 despite the low sales of 104 850.

pg. 34