INDIVIDUAL

ASSIGNMENT
NAME: NGUYỄN ĐINH LONG GIANG
STUDENT ID: HS153006
CLASS: IS1401
COURSE: ACC101
LECTURER: NGUYỄN PHÚ HÀ
SUBMISSION DATE: 01/04/2021
I. INTRODUCTION
II. SUMMARY
1. Background of Gen Company.
2. The main activity of Gen Company.
III. CASE ANALYSIS
1. Description of the transaction.
2. Journal entries and evaluation.
3. Financial statements: income statement, balance sheet, cash flow.
IV. CONCLUSION
V. REFERENCE

I. INTRODUCTION
Through the research and performance statistics of the new Gen company
established in March 2021, we will describe and compile its journal entries for the
first month of operation and evaluate its performance. At the same time, we will do
financial statements including: income statement, balance sheet, cash flow to get the
most comprehensive assessment of Gen company.

1. BACKGROUND OF GEN COMPANY.

Gen Company is a company established in March 2021 in Vietnam and operating
under the direction of the general manager Long Giang.

Gen Company operates in the service sector, specifically selling fast food, drinking
water. The company has both offline (10 stores in major cities) and online (Grab
app) sales channels.
2. THE MAIN ACTIVITY OF GEN COMPANY.

The company specializes in selling fast food and beverage for retail customers and
pre-order.

Under the proper management and management of the general manager, the
company achieved a lot of success in the first month of its launch with wide
coverage and good sales.

In addition, this is a company known for its early remuneration as a gift for its
employees, active in the early days of the company.

1. DESCRIPTION OF THE TRANSACTION.

The cash of the newly established Gen Company on March 1, 2021 is

600,000,000vnd. The company received from the supplier some spare equipment
worth 20,000,000vnd as a congratulatory gift. Gen rents a building from its owner
for 240,000,000vnd per month. The company prepaid the owner in cash. (1)

Gen Company has used the housing cleaning service of Housing Services
Company to clean and decorate the office for 90,000,000vnd on March 2. By a
prearrangement, Gen company delayed the payment in two installments, one on
March 10, and one on March 15. (2)

On March 3, Gen Company spent 1,000,0000vnd to buy stationery equipment and

pay in cash. (3)

Gen Company purchased furniture from Furniture Company for 27,000,000vnd on

March 4 under Credit terms of 1/2, n/60. (4)
On March 5, Gen Company had pre-stocked goods to prepare for opening, it
purchased food from Food Company for 75,000,000vnd under Credit terms of 2/10,
n/50. That same day, the company also reserves a quantity of drinking water in
stock, importing goods from Best Drinks Company for 20,000,000vnd under Credit
terms of 1/2, n/30. (5)

Because of the active work, the company decided to pre-pay the active employees
in the amount of 6,000,000vnd on March 6 in cash. (6)

To prepare for the opening day, the company hired an advertising agency to
campaign for it to launch for 1,000,000vnd on March 7 in cash. (7)

Gen Company paid 500,000vnd electricity bill and 1,000,000vnd warehouse

cleaning fee on March 8 in cash. (8)

On March 9, Gen Company paid 27,000,000vnd in cash to Furniture Company,

paid 75,000,000vnd in cash to Food Company, paid 20,000,000vnd in cash to Best
Drinks. (9)

Gen Company sold 20,000,000vnd on the first opening day, known the
merchandise has cost 14.000.000vnd on March 10. At the same time that day, the
company pays 50,000,000vnd to Housing Services Company in cash as agreed
before. (10)

The gen company paid the March salary to the active salesman in cash for
14,000,000vnd on March 11. Because of wanting to promote more advertising, the
company continued to spend another 2,000,000vnd on advertising in cash. (11)

Because the sales were too good, the company imported food for 50,000,000vnd
from Food Company and drinking water for 15,000,000vnd from Best Drinks
Company on March 12 under Credit terms of 1/2, n/30. Shipping cost of the
company is 100,000vnd in cash. The total amount of merchandise inventory is
65,000,000vnd. (12)

Since there are some near-expiration goods that do not meet the standards, Gen
Company has returned them to Food Company. The merchandise has cost
5,000,000vnd on March 13. (Gen company's total debt with Food company
decreased from 50,000,000vnd to 45,000,000vnd.) (13)
Gen Company has to pay a 1,000,000vnd water bill, 300,000vnd telephone bill, and
1,500,000vnd shipping support costs for customers in cash on March 14. At the
same time, the company also earned 30,000,000vnd in sales and the merchandise
has cost 21,000,000vnd. (14)

As agreed before, Gen company has paid the remaining 40,000,000vnd to Housing
Services Company in cash on March 15. (15)

Because Gen company wants to expand more goods for sale, it imported more
goods from Nutty Goods Company for 80,000,000vnd under Credit terms of 1/2,
n/30 on March 16. The merchandise has cost 80,000,000vnd. (16)

The company registered to store online on Grab app to increase the diversity of
sales channels, after many days of selling, the company has collected
50,000,000vnd in sales, known the merchandise inventory has cost 40.000.000vnd
on March 17. (17)

On March 18, because the products were not of good quality, the company paid
80,000,000vnd to Nutty Goods in two forms: cash for sold goods worth
79,200,000vnd, and returning inventory worth 800,000vnd. The company does not
receive the incentive credit because the goods are returned. (18)

Gen Company received a turnover of 28,000,000vnd in cash, known the

merchandise inventory has cost 16,000,000vnd on March 19. (19)

The gen company paid the March salary to the officers in cash for 14,000,000vnd
on March 20. Because of wanting to promote more advertising, the company
continued to spend another 2,000,000vnd on advertising in cash. (20)

On March 21, Gen Company paid 45,000,000vnd in cash to Food Company, paid
15,000,000vnd in cash to Best Drinks. The total amount the company has paid in
cash is 60,000,000vnd. (21)

On March 22, Gen company imported food for 20,000,000vnd from Food Company
and drinking water for 15,000,000vnd from Best Drinks Company under Credit
terms of 1/2, n/30. The total amount of merchandise inventory is 35,000,000vnd.
(22)
Gen Company has to pay a 1,000,000vnd gas bill, 300,000vnd telephone bill, and
1,000,000vnd shipping support costs for customers in cash on March 23. Total cash
payable is 2,300,000vnd. At the same time, the company also earned
39,000,000vnd in sales and the merchandise has cost 24,000,000vnd. (23)

Gen company has collected 50,000,000vnd in sales from Grab sales channel,
known the merchandise inventory has cost 40,000,000vnd on March 24. (24)

Because goods delivered far away are not of a guarantee of quality, food and drink
are returned by customers on grab app worth 3,000,000vnd. The merchandise has
cost 2,400,000vnd on March 25. (25)

On March 26, to attract customers on Grab, Gen Company received a 1% discount

on each order from the app. The company has advanced 46,530,000vnd in cash and
reduced 470,000 VND in price. The total amount the company needs to recover
from Grab is 47,000,000vnd. At the same time, the company also earned
36,000,000vnd in sales and the merchandise has cost 20,000,000vnd. Due to
receiving party orders from Fitness & More Center, Gen Company has provided
combo food and drink worth 20,000,000vnd in cash. Gen Company needs to
recoup this amount from Fitness & More Center. (26)

On March 27, Gen Company has provided food and drink to customers through the
grab app with a total order value of 50,000,000vnd in cash. The company needs to
recoup 50,000,000vnd from Grab. (27)

Gen company has collected 20,000,000vnd in sales from Grab sales channel,
known the merchandise inventory has cost 16,000,000vnd on March 28. Shipping
cost of the company is 100,000vnd in cash. (28)

The gen company paid the March salary to the active logistics staff in cash for
14,000,000vnd on March 29. Because of wanting to promote more advertising, the
company continued to spend another 2,000,000vnd on advertising in cash. (29)

Because of discharging a lot of wastewater that clogged the sewer, Gen company
had to pay 1,000,000vnd in cash to solve the problem on March 31. In addition, the
company also had to pay 300,000vnd for the telephone bill of the telesale room.
The total amount of cash payable by the company for these two invoices is
1,300,000vnd. At the same time, the company also earned 30,000,000vnd in sales
and the merchandise has cost 18,000,000vnd. (31)
2. JOURNAL ENTRIES AND EVALUATION.

Through journal entries, we can see that Gen company is growing day by day and
having steady sales for the first month. However, the company is having problems
with the management and use of capital effectively. That leads to slow return of
equity and difficulty to turn around capital when necessary. At the same time,
because the company was just in operation, the company had to pay a large amount
for operating expenses such as compensation, advertising, utilities expense,
cleaning expenses, prepaid rent, supplies,...

Even so, the steadily growing revenue is a good signal for the company that it is
well received by the market and has a strong potential for strong growth in the
future.
3. FINANCIAL STATEMENTS:INCOME STATEMENT,
BALANCE SHEET, CASH FLOW.
As mentioned above, as a new company, Gen Company has to pay a lot for the
operating account (we can clearly see the expenses listed on the Income Statement
table), which makes the net income of Gen in the first month is - 82,770,000vnd.

Although the total expense ratio is higher than the total revenue to 43.9%, but return
on total assets is -0.13% - This is not too low, especially in the first month.

One thing that is quite positive for Gen Company is that the sale discount and expense
metrics for advertising are still low in order to recoup net sales.
IV. CONCLUSION
Through financial statements (such as income statement, balance sheet, cash flow)
and journal entry about Gen company's activities in the first month of operation, we
have analyzed many problems and lessons to learn from future. When starting a
business, we need to have a good understanding of the company's financial
numbers to come up with growth options that match the situation. Not only that,
this assignment also shows the importance of financial statements for a business
when doing business planning.
We have heard the saying: A good business person must be someone who is good at
finance (Shark Tank). So, when we understand the financial situation of the
company, it is possible to optimize the company's model to generate profits.

IV. REFERENCE
1. John, J. (2012). Fundamental Accounting Principles. 20th ed. USA: Cengage
Learning, pp.544.
2. smallbusiness.chron.com, (2015). Chron. [online] Available at:
//smallbusiness.chron.com/review-manual-journal-entries-41159.html
[Accessed 2015].
3. topicanative.edu.vn, (2020). TOPICA NATIVE. [online] Available at:
//topicanative.edu.vn/tu-vung-tieng-anh-chuyen-nganh-ke-toan/ [Accessed 20
Apr. 2020].
4. investopedia.com, (2018). INVESTOPEDIA. [online] Available at:
//www.investopedia.com/investing/what-is-a-cash-flow-statement/ [Accessed
15 Oct. 2018].