Recording Business Transactions - portfolio 1 and 2

This report provides a detailed analysis of Recording Business Transactions for Anne York. It includes journal entries, ledger accounts, trial balance, income statement, balance sheet, and ratio calculation. The report also explains the concept of drawings and its impact on the business. The subject is Accounting and the course code is ACC101. The report is relevant for students pursuing Accounting courses in any college or university.

Recording Business Transactions

Table of Contents
ASSESSMENT.....................................................................................................................................4
Part A:...............................................................................................................................................4
Part B...............................................................................................................................................11
REFERNCES......................................................................................................................................14

ASSESSMENT
Part A:
a) Journal entry of Anne York as at October 2021

Date Journal Debit £ Credit £
1 Oct 2021 Bank A/C 10000
Cash A/C 4800
Flat A/C 45000
Car A/C 12000
To Capital A/C 71800
2 Oct 2021 Purchase A/C 5400
To Home ltd A/C 5400
4 Oct 2021 Computer A/C 800
Printer A/C 200
To Bank A/C 1000
5Oct 2021 Bank A/C 2800
To Sales A/C 2800
12 Oct 2021 Repairing A/C 110
To Cash A/C 110
18 Oct 2021 Home ltd A/C 250
To Purchase return A/C 250
21 Oct 2021 Bank A/C 800
To Rent A/C 800
23 Oct 2021 Cash A/C 1800
Rayan A/C 300
To sales A/C 2100
23 Oct 2021 Cash A/C 700
To Sales A/C 700
24 Oct 2021 Laptop A/C 1700
To Bank A/C 1700
26 Oct 2021 Wages A/C 820
To Bank A/C 820
30 Oct 2021 Rent expense A/C 850
To bank A/C 850
31 Oct 2021 Drawings A/C 1200
To Bank A/C 1200
31 Oct 2021 Cash A/C 150
To Ryan A/C 150

b) Ledger accounts prepared for Anne York
Purchase
Date Basis £ Date Basis £
2 Oct 2021 To Home ltd A/C 5400 02 Oct 2021 By home ltd 250
31 Oct 2021 By balance c/d 5150
5400 5400
Home Ltd
Date Basis £ Date Basis £
18 Oct 2021 To Purchase return A/C 250 2Oct 2021 By Furniture A/C 5400
31 Oct 2021 To balance c/d 5150
5400 5400
Computer
Date Basis £ Date Basis £
4 Oct 2021 To Bank A/C 800 31 Oct
2021
By balance c/d 800
800 800
Printer
Date Basis £ Date Basis £
4 Oct 2021 To Bank A/C 200 31 Oct
2021
By balance c/d 200
200 200
Bank
Date Basis £ Date Basis £

1 Oct 2021 To Capital A/c 10000 4 Oct 2021 By Computer A/C 800
5Oct 2021 To Sales A/C 2800 Printer A/C 200
30 Oct 2021 To Rent A/c 800 24 Oct 2021 Laptop A/C 1700
26 Oct 2021 Wages A/C 820
30 Oct 2021 Rent A/c 850
31 Oct 2021 Drawings A/C 1200
31 Oct 2021 By balance c/d 8030
13600 13600
Sales
Date Basis £ Date Basis £
31 Oct 2021 By balance c/d 5600 5 Oct 2021 By Bank A/C 2800
23 Oct 2021 Cash A/C 1800
Rayan A/C 300
23 Oct 2021 Cash A/C 700
5600 5600
Repairing
Date Basis £ Date Basis £
12 Oct 2021 To Cash A/C 110 31 Oct 2021 By balance c/d 110
110 110
Cash
Date Basis £ Date Basis £
1 Oct 2021 To capital A/C 4800 12 Oct 2021 By Repairing A/C 110
23 Oct 2021 To sales A/C 1800 31 Oct 2021 By balance c/d 7340
To Sales A/C 700
To Ryan A/C 150

7450 7450
Rayan
Date Basis £ Date Basis £
23 Oct 2021 To sales A/C 300 31 Oct 2021 By Cash A/C 150
By balance c/d 150
300 300
Laptop
Date Basis £ Date Basis £
23 Oct 2021 To Bank A/C 1700 31 Oct 2021 By balance c/d 1700
1700 1700
Wages
Date Basis £ Date Basis £
23 Oct 2021 To Bank A/C 820 31 Oct 2021 By balance c/d 820
820 820
Drawings
Date Basis £ Date Basis £
31 Oct 2021 To Bank A/C 1200 31 Oct 2021 By balance c/d 1200
1200 1200

Flat
Date Basis £ Date Basis £
1 Oct 2021 To Capital a/c 45000 31 Oct 2021 By balance c/d 45000
45000 45000
Car
Date Basis £ Date Basis £
1 Oct 2021 To capital a/c 12000 31 Oct 2021 By balance c/d 12000
1200 12000
Capital
Date Basis £ Date Basis £
31 Oct 2021 To balance c/d 71800 1 Oct 2021 By Bank a/c 10000
By Cash a/c 4800
By flat a/c 45000
By car a/c 12000
71800 71800
Rent
Date Particulars Ref Amount Date Particulars Ref Amount
21/10/21 Bank 850 30/10/21 Bank 800
31/10/21 Balance c/d 50
850 850
b) Trial Balance as at 31 October 2021

d) Income Statement of Anne York as on 1st October 2021
Basis £ £
Net sales 5600
Less COGS
Opening inventory 0
Purchase 5150
Closing inventory (320) 4830
Gross profit 770
Less operating expenses
Rent 50
Accounts Debit Credit
£ £
Purchase 5150
Home ltd 5150
Computer 800
Printer 200
Bank 8030
Sales 5600
Repairing 110
Cash 7340
Rayan 150
Laptop 1700
Wages 820
Drawings 1200
Flat 45000
Car 12000
Capital 71800
Rent 50
82550 82550

Repairing 110
Wages 820
980
Net income before tax and
interest
Less interest
Net LOSS (210)
e) Balance sheet as at 31st October 2021
ASSETS:
Current Assets:
Cash
Bank
Debtor
Inventory
Total Current Assets
7340
8030
150
320
15840
Long Term Assets:
Laptop
Flat
Car
Computer
Printer
Total Fixed Assets
1700
45000
12000
800
200
59700
TOTAL ASSETS 75540
LIABILITIES
Current liabilities:
Creditors
Total Current Liabilities
5150
5150
Owner’s equity:
Capital
Less: Drawings
71800
(1200)

Net loss
Total Equity
(210)
70390
TOTAL LIABILITIES 75540
f) Drawings are the capital or some king of Assets that are taken out from the business so that
it can be used for personal purpose. Drawings are different from expenses because either they
reduce the assets of the company or owners equity. As Anne with draw the amount from the
bank account of the business and pay it for her holidays that why the capital is treated as
drawing because she is using it for her personal use. So in this report her holiday expenses is
made up of drawings that is taken out from the company (Faber and Friedline, 2020).
Part B
a) Calculation of ratio for October2021
Net profit margin
Net profit / Sales
Net loss 210
Sales 5600
Net profit margin 3.75
Gross profit ration
(Gross profit / sales) *100
Gross profit 770
Sales 5600
Gross profit margin 13.75
Current ratio
Current assets / Current liability
Current assets 15840

Current liability 5150
Current ratio 3.10
Acid ratio
Quick assets / current liability
Quick assets 15160
Current liability 5150
Quick ratio 2.94
Accounts receivable period
(Debtors / sales) *365
Debtors 150
Sales 5600
Account receivable period 9.77 days
Account Payable period:
(Creditors / sales) *365
Creditors 5150
Purchase 5400
Account receivable period 34.33 days
b) Net profit margin: From the above calculation it is found that Net profit margin in
October 2021 of Anne York is 3.75which was good from the other competitor in the year in
2019 which was 0.32, 2020 is 0.28 and in 2021 it is 0.02. This shows that company perform
good at Covid 19 from the other the impact of pandemic was not as high as it was for the
other rivalry (Sagala, 2019)

Gross profit ratio: The profit margin of the company is 13.75 in October 2021. This
means that company production is quite good from the Competitors in the year 2019,
2020,2021 which is 0.55, 0.56 and 0.08.company hit by the pandemic but quite earn good
return than the other firm within the industry (Casado-Vara and Corchado, 2019).
Current ratio and Quick ratio: Company’s current ratio and the quick ratio on
October is 3.10and 2.94. The current ratio of the company is low from the competitor which
suggest that company does not have enough current assets that can be paid to meet the short
term obligation if we compared from the 2.7, 2.6 and 2.8 in the year 2019, 2020 and 22021 of
the rivalry. Quick ratio of the company was high from the competitor that is 1.34, 1.32 and
1.38 (Siregar, Rambe and Simatupang, 2021).
Account receivable period: this period is calculated by the company so that it can
calculate the das which are required by them to pay the amount to the debtors. In Anne York
the days are 9.77 days which is good from the other firm which take 16, 28 and 26 days
respectively. It means that the company is good enough to pay the amount to their debtors.
This time period help them to create a goodwill and image in the market. the accompany
impact was low in comparison to others in the time of Covid 19 outbreak. (Podile, Sivasree
and Rani, 2020).
Account payable period: it shows the number od days which are taken by the
creditors to pay the amount to Anne York. The time period of the company is high that is 33
days which is more than that of other. the impact is that the company was not in the state
were they can raise their capital from the market (Oladipupo and Olatunbosun, 2021).

REFERNCES
Casado-Vara, R. and Corchado, J., 2019. Distributed e-health wide-world accounting ledger
via blockchain. Journal of Intelligent & Fuzzy Systems. 36(3). pp.2381-2386.
Faber, J.W. and Friedline, T., 2020. The Racialized Costs of “Traditional” Banking in
Segregated America: Evidence from Entry-Level Checking Accounts. Race and
Social Problems. 12(4). pp.344-361.
Lin, S., and et. al, 2018. Is other comprehensive income reported in the income statement
more value relevant? The role of financial statement presentation. Journal of
Accounting, Auditing & Finance. 33(4). pp.624-646.
Oladipupo, O.F. and Olatunbosun, F., 2021. Emphasizing the Working Capital Management
and Firms’ Profitability: Evidence from Quoted Firms on the Nigerian Stock
Exchange. New Ideas Concerning Science and Technology Vol. 4. pp.149-162.
Podile, V., Sivasree, C.H.V. and Rani, K.S., 2020. Receivables Management in Micro and
Small Enterprises. Journal of Critical Reviews. 7(18). pp.722-726.
Rozario, A.M. and Vasarhelyi, M.A., 2018. How robotic process automation is transforming
accounting and auditing. The CPA Journal. 88(6). pp.46-49.
Sagala, D.A.P.H., 2019, October. Effect of Current Ratio, Debt To Equity Ratio, Net Profit
Margin, and Total Asset Turnover on Earning Per Share. In International
Conference on Global Education (pp. 1507-1521).
Siregar, Q.R., Rambe, R. and Simatupang, J., 2021. PengaruhDebt to Equity Ratio, Net Profit
Margin dan Return On Equity Terhadap Harga Saham Pada Perusahaan Property
dan Real Estate yang Terdaftar di Bursa Efek Indonesia. Jurnal AKMAMI
(Akuntansi Manajemen Ekonomi). 2(1). pp.17-31.