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Principles of Accounts

School Based Assessment


On
Jenson Johnson Hardware

Candidates Name: Shamar Page


Registration Number:
School: DeCarteret College
Centre Number: 100025
Name of Teacher: Ms. Turner
Year of Examination: 2017
Date of Submission: March 10, 2017.
Caribbean Examination Council
Principles of Accounts
2017

Candidates Name: Shamar Page


Registration Number:
School: DeCarteret College
Centre Number: 100025
Name of Teacher: Ms. Turner
Year of Examination: 2017
Date of Submission: March 10, 2017.

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

Accounting Procedures and Record Kept.......................................................................5-22

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

financial aspect of his business.

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

The aims of the project are to:

better understand the accounting cycle and accounting principles.


to interpret and analyze accounting information accurately.
use the accounting information to access the business performance.

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

Hardware Store is located at 2 nd Hatsfield, Mandeville, Manchester. The business is opened at

7:00 am to 8:00 pm weekdays at 9:00 am to 5:00 pm on Saturdays. Jenson Johnsons Hardware

Store can be reached by via phone at (876) 457-4155, or at Jonhsonhardwarestore@yahoo.com.

4
Accounting Procedures Used and Records Kept

General Journal- This records transactions that are not in the other books of original entry.

Jenson Johnson's General Journal Pg.10


Date Details Folio Dr$ Cr$
2013 $ $
Dec.1 Land GL1 $ 300,000.00
Dec.1 Fixtures GL2 $ 18,000.00
Dec.1 Motor Van GL3 $ 209,000.00
Dec.1 Stocks GL4 $ 22,100.00
Samuel
Dec.1 Debtors: Mundy SL1 $ 6,060.00
John
Thompson SL2 $ 5,225.00
Jason Hill SL3 $ 800.00
Cash at Hand CB1 $ 162,000.00
Cash in Bank CB2 $ 21,000.00
D&P $
Dec.1 Creditors Hardware PL1 4,500.00
Building $
Supplies PL2 9,000.00
Provisons of Bad $
Dec.1 Debts GL5 5,000.00
$
725,685.
Dec.1 Capital GL6 00
$
744,185.
Assets&Liabilities $ 744,185.00 00
Enterd to open the
books
Dec.15 Computer GL7 $ 35,000.00
$
35,000.0
Dec.15 Computer Technolgy PL3 0

Dec.16 Bad Debt GL8 $ 60.00


$
Dec.16 Samuel Mundy SL4 60.00

Dec.28 Building Equipment $ 23,520.00

5
$
23,520.0
Dec.28 Tools Ltd. 0

Sales Journal-Record all credit sales.

Sales Journal (Page18)


Foli
Date Details Invoice# o Amount
Dec.4 Jason Hill 1 SL16 $ 9,000
Dec.9 John Thompson SL22 $ 3,500

Dec.23 Jeneffy Gayle SL24 $ 18,000

Dec.31 Transfer credit Sales GL55 $ 30,500

Returns Inwards Journal- records all goods returned to the business by its customers.

Jenson Johnson

Returns Inwards Journal pg. 10


Date Details Folio Amount
2016
Dec. 22 Jason Hill SL12 798.00
Dec. 24 Jeneffy Gayle SL39 1,200.00

Dec. 31 Transfer to Ret. Inwards A/C GL $1,998.00

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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

Sales Ledger- Records all debtor accounts.

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

Date Details $ Date Details $

2013 2013
$ Return $
Dec.23 Sales 18,000 Dec.24 Inward 1,200
$
Dec.26 Bal c/d 16,800
$ $
18,000 18,000

Purchases Ledger- Records all creditors accounts.

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

General Ledger- To record all real and nominal


11 account.

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 Technology A/C


Date Details Folio $ Date Details Folio $
Dec.15 Cash 15,000 Dec.15 Computer 35,000
Dec.31 Bal c/d 20,000
35,000 35,000
2014
Jan.1 Bal b/d 20,000

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

Discount Received A/C


Date Details Folio $ Date Details Folio $
Trading
Dec.22 Jason Hill 798 Dec.31 A/C 1,998
Dec.24 Jeneffy Gayle 1,200
1,998 1,998
Jan.1 Bal b/d 1,998

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

Telephone Bill A/C


Date Details Folio $ Date Details Folio $
Profit &
Dec.28 Bank 2,000 Dec.31 Loss 2,000

2,000 2,000
2014
Jan.1 Bal b/d 2,000

Provision of Bad Debts A/C


Date Details Folio $ Date Details Folio $
Dec-31 Profit&Loss 5,000 Dec.1 Bal b/f 5,000
1
5,000 5,000

2014
Jan.1 Profit&Loss 5,000

14

Return Outwards A/C


Date Details Folio $ Date Details Folio $
Bal c/d 1,700 Dec.15 Grano's 500
Building
Dec.16 Supplies 1,200
1,700 1,700

Jan.1 Bal b/d 1,700


Building Equipment A/C
Date Details Folio $ Date Details Folio $
Dec.28 Cash 2,352 Dec.31 Bal c/d 2,352

2,352 2,352
2014
Jan.1 Bal b/d 2,352

Bad Debt A/C


Date Details Folio $ Date Details Folio $
Profit &
Dec.31 Samuel Mundy 60 Dec.31 Loss 60

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

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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

Motor Van A/C


Date Details Folio $ Date Details Folio $
Dec.1 Bal b/f 209,000 Dec.31 Bal c/d 209,000

209,000 209,000
2014
Jan.1 Bal b/d 209,000

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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

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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

Rent Received A/C


Date Details Folio $ Date Details Folio $
Dec.31 Trading A/C 40,000 Dec.31 Bank 40,000
40,000 40,000

2014
Jan.1 Bal b/d 40,000

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Jenson Johnsons

Trial Balance As At Year Ended 31 December 2013


Details Debit Credit
Debtors $ 9,002
Creditors
Bank $ 81,372
Cash $ 500
Capital $ 725,685
Sales Jenson Johnson's $ 135,900
Trading Motor VanLoss Account for$The
Profit and 209,000
Year Ended 31 December 2013
Land $$300,000 $ $
Sales Fixtures $ 30,500 $ 135,900
Stock
Less Return Inwards $ 22,100 $ 1,998
Computer $ 20,000 $
Net Sales Computer Technology $ 20,000 133,902
Less Cost of Goods Sold
Wages $ 168,000
Opening Stock Discount Allowed $ $22,100225
Add Purchases Discount Received $ 168,325 $ 225
Less Return Outwards
Return Inwards $ 1,700$ 1,998 $ 166,625
Cost of Goods Available
Return Outwards $ 188,725
$ 1,700
Less Closing Stock
Insurance $ 3,000 $ 14,500
Bad Debt $ 60 $
Cost of Goods Available
Provison of Bad Debt $ 5,000 174,225
-$
Water $ 2,900
Gross Loss 40,325
Rent Received $ 40,000 $
Rates
Add Discount Received $ 1,500 225
Drawings $ 1,000 $
Rent Received Building Equipment $ 2,352 40,000
Transportation $ 800 $
Bad Debt Telephone Bill $ 200 450
D&P Hardware $ 15,000 $
352
Building Supplies $ 80,425
Less Expenses Purchases $ 168,325
Transportation Grano's $ 800 $ 14,500
Telephone Bill Jon's Hardware $ 1,400 5700
Wages&Salaries $ 168,000
$1,045,135 $
Bad Debt $ 60 1,045,135
Discount Allowed $ 225
Rates $ 1,500
Insurance $ 2,000
Water $ 20
2,900
$ 177,825
$
177,533
Jenson Johnsons
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Balance Sheet as at December 31,2016


Fixed Assets
Building Equipment $ 2,352
Motor Van $ 209,000
Fixtures $ 30,500
Land $ 300,000
Computer $ 35,000
$ 576,852
Current Assets
Stock $ 14,500
Debtors $ 9,002
Less Provision of Bad Debt $ 4,660
$ 4,452
Prepaid Expenses $ 600
Cash in Hand $ 5,000
Cash at Bank $ 81,373
$ 105,925
Less Current Liabilties
Creditors $ 115,625
Computer Tech Ltd. $ 20,000
$ 135,625
Working Capital $ 29,700
$ 541,152
Fiananced by
Capital $ 725,685
Add Net Loss -$ 177,533
Less Drawings $ 548,152
$ 1,000
547152

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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

didnt qualify to obtain a loan from NCB.

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.

Net Loss vs Gross Loss


0%
19%

81%

Net Loss Gross Loss 3rd Qtr 4th Qtr

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.

Profitability Ratios used to measure the efficiency of management in the employment of

business resources to earn profits.

Gross Profit Margin:

Gross Profit x 100%

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

necessary expenses have been paid.


As shown, much use of capital hasnt been made. This ratio shows how many dollars in loss each

dollar in capital employed generates. For every24


dollar invested in capital employed, the business

made a loss of $24.

Net Profit Margin:

Net Profit/Loss x 100%

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

expenses have been paid.


EFFICIENCY:
25

Stock Turnover:

Cost of Goods Sold

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.

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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

making or if the business is being improved or worsened.

Stock Comparison

40%
60%

Opening Stock Closing Stock

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

quantity of stock left in the business for the financial year.

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

wants his business to become profitable.


The business has a gross loss because it is not earning enough to cover the cost of goods

sold. The business therefore needs to boost it sales by increasing sales force, start online

selling,bogo and offer quality discounts.


In order to increase the current ratio, give debtor incentives to those persons are that are

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

9 black water road, Invoice No: 2107


Ackee Street, Account No: K/4499
St. Mary Date: 09 December 2013

Your purchase order 99/BS


Quantity Per unit ($) Total ($)

10 solitext board 150 1,500


2 two by four 134 268
4 bags of cement 434 1,732
3, 500

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CREDIT NOTE
Jenson Johnsons Hardware Store
Black Port Road, Mandeville, Manchester
Jeneffy Gayle Telephone: (876) 998-4564

45 Marcuc Street, Debit Note No: 9/11


Morant Bay, Account No: V/5880
St. Ann Date: 24 December 2013

Quantity Per unit ($) Total ($)

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

Hatsfield, Debit Note No: 1/23


Mandeville, Account No: R/9463
Manchester. Date: 24 December 2013

Quantity Per unit ($) Total ($)

8 Cement 50 400
100 blocks 20 800
1,200

35
Date December 29, 2013.

From Tommy Black Of $ 40, 000


Forty Thousand Dollars
DOLLARS

FOR rent

ACCT R/9463 FROM T. Black TO J. Johnson

PAID December 29, 2013 BY Jenson Johnsons Hardware DUE

December 25, 2013.

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