Recording Business Transactions: Process, Decision Makers, Journal Entries, Income Statement, Prediction

This article covers the process of starting a new business enterprise as a Decorator, identifying the decision makers of the business organization, journal entries for the month September 2021, income statement of P Moore ending 31st September 2021 and prediction for the year 2022.

Recording Business
Transactions
Table of Contents
1

Part – A............................................................................................................................................3
(1) Process for starting a new business enterprise as a Decorator..............................................3
(2) Identify the decision makers of the business organization which are responsible for the
process of the decision making in context to the company listed on the London Stock
Exchange.....................................................................................................................................4
Part – B............................................................................................................................................5
(a) Journal Entries for the month September, 2021....................................................................5
Part – 4.............................................................................................................................................9
(a)Income Statement of P Moore ending 31st September, 2021..................................................9
(b) Based on the income statements of previous year predict that whether the company will
attain profits or losses in the year 2022.....................................................................................10
References......................................................................................................................................10
Books & Journals......................................................................................................................10
2

Part – A
(1) Process for starting a new business enterprise as a Decorator.
A sole trader business can be defined as a business structure which basically involves the
participation of an individual person who is responsible for running the whole business (Bradlow
and Finkelstein, 2018). Also, all the decisions lie with the owner regarding all the important
matters of business organization of sole trade. Therefore, the process of setting up a sole trade
business is given below as a Decorator:
 Idea generation: The first step before starting a sole trade business is that it should have
an idea on the basis of which the whole business is going to work. In context of being a
decorator, the owner specifically needs to identify and analyse that what new can be
offered to the target audience so that they can be highly attracted towards the business.
Therefore, the idea of uniqueness along with the quality of work can help in having a
competitive advantage amongst the competitors.
 Financing the proposition: the second and one of the most important step is to arrange
the finances because it is highly important for the business that it must have sufficient
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funds to run the business smoothly.in relation to the Decorator sole trade business, the
owner have to find the trustable and authentic sources of funds that can be effectively
invested in the business to have an efficient financial status.
 Location of business: It is highly significant for any business to set up its organization as
the most relevant places so that it can attract and grab more and more customers on a
regular basis. In consideration to the business of a Decorator, it will be recommended to
run its business operations in the big cities. The major reason behind that is the
opportunities for businesses like event decorating are in more abundance and it is
comparatively much easier for the business to thrive and achieve success in longer run.
Human resource selection: in order to run a successful business organization it is highly
important that it is having an effective and efficient workforce which is helping the organization
to run its business operations in the most suitable manner (Søgaard, 2021). In context to the
Decorator business, a workforce with the attributes of creativity, hardworking along with a high
level work commitment is required in order to achieve success in a more consistent way.
 Tax planning: Taxes as something which can consume the earnings of the business and
result into reduced amounts coming in the hands of the owners. Therefore, in relation to
the respective business, it is highly advisable that the business is must perform an
effective tax planning in order to reduce the tax liabilities of a particular financial year
(Appelbaum and Nehmer, 2020).
 Launching the enterprise: Once all the above steps have been perfectly performed it is
the time to launch the business in the market. In context to business of Decorator, after
completing all the above formalities, steps and procedures the business can be effectively
launched in the marketplace with an objective to achieve success along with the huge
profits in the long run.
(2) Identify the decision makers of the business organization which are responsible for the
process of the decision making in context to the company listed on the London Stock
Exchange.
Decision makers can be defined as the people in the company who have the authority and the
power to making different types f important and strategic decisions. These decisions can be
related to acquisitions, mergers or expansion (Downer, Cooper, and Faseruk, 2018). In
context to Unilever, which is considered as one of the leading company on the London Stock
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Exchange also have different decision makers who are involved in the process of making
decisions for all the business related matters. The different decision makers are explained
below in relation to the respective organization:
 Company managers: Company managers play an important role in preparing the action
plans that majorly helps in achieving the goals of the company in the most effective
manner. In context to Unilever, it managers always ensures that all the employees in the
company are working efficiently and executing all the strategy devised by the manager.
 Investors: They are the most important decision makers of the company. The major
reason behind that is they are the ones who help in increasing the value of shareholders,
reduce the cost of capital and build an efficient credibility in the community of
investment over a long period of time (Ballou, Heitger and Stoel, 2018). In context to the
respective company, the investors take full responsibility of taking decisions in different
matters of the company so that the business can run effectively.
 Analysts: These are the ones who focus on a pro-active approach before handling a
particular type of situation in a very smart manner. In context to Unilever, they have a
whole team of analysts who are majorly involved in the process of examining the
information of the financial data in order to take an action (Drew, 2019). Also, they are
having a huge amount of capability to handle the business activities and most likely to
operate all the steps in the process of decision making.
Part – B
(a) Journal Entries for the month September, 2021
Date Particulars Debit
Amount
Credit
Amount
01/09/2021 Bad Debts A/C Dr.
To P Mullen A/C Cr
(Being debts written off)
105
105
05/09/21 Syme Ltd A/C Dr.
To Office Fixtures A/C Cr.
(being office fixtures returned)
150
150
5

10/09/21 Cash or bank A/C Dr.
Bad Debts A/C Dr.
To M Abel A/C
(being amount recovered in the full settlement)
180
131
311
18/09/21 Machinery A/C Dr.
To cash A/C cr.
To bank A/C Cr.
To Brown Ltd A/C Cr.
(Being machinery purchased by cash, bank and on
credit)
1800
100
500
1200
26/09/21 Brown Ltd A/C Dr.
To Bank A/C Cr.
(being half amount paid to Brown Ltd)
600
600
28/09/21 Insurance A/C Dr.
Drawings A/C Dr.
To Bank A/C Cr.
(Being insurance paid)
60
70
130
(2)
a. Prepare Ledger Accounts for August, 2021.
Cash A/C
Particulars Amount
(Debit)
Particulars Amount
(Debit)
To bank A/C
To bank A/C
2800
430
By office fixtures A/C
By balance c/d
110
3120
TOTAL 3230 TOTAL 3230
Bank A/C
Particulars Amount Particulars Amount
6

(Debit) (Debit)
To Satandar A/C
To sharp office A/C
To balance c/d
12400
2400
7050
By cash in hand A/C
By secomd hand van A/C
By office fixtures A/C
By Toyota A/C
By office fixtures A/C
2800
6200
3400
8700
750
TOTAL 21850 TOTAL 21850
Satandar A/C
Particulars Amount
(Debit)
Particulars Amount
(Debit)
To balance c/d 12400 By bank A/C 12400
TOTAL 12400 TOTAL 12400
Second hand van A/C
Particulars Amount
(Debit)
Particulars Amount
(Debit)
To balance c/d 6200 By bank A/C 6200
TOTAL 6200 TOTAL 6200
Office Fixtures A/C
Particulars Amount
(Debit)
Particulars Amount
(Debit)
To bank A/C
To Sharp Office Ltd A/C
To Cash A/C
1000
2400
110
By balance c/d 4260
7

To Bank A/C 750
TOTAL 4260 TOTAL 4260
Sharp Office A/C
Particulars Amount
(Debit)
Particulars Amount
(Debit)
To bank A/C
To balance c/d
1000
2300
By office fixtures A/C 3400
TOTAL 3400 TOTAL 3400
Van A/C
Particulars Amount
(Debit)
Particulars Amount
(Debit)
To Toyota A/C 8700 To balance c/d 8700
TOTAL 8700 TOTAL 8700
Toyota A/C
Particulars Amount
(Debit)
Particulars Amount
(Debit)
To bank A/C 8700 By van A/C 8700
TOTAL 8700 TOTAL 8700
Trial Balance
Particulars Amount
(Debit)
Amount
(Credit)
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Cash A/C 3120
Bank A/C 7050
Satandar A/C 12400
Second hand van A/C 6200
Office fixtures A/C 4260
Sharp office Ltd A/C 2300
Van A/C 8700
Toyota A/C - -
Suspense A/C 11870
TOTAL 27950 27950
Part – 4
(a)Income Statement of P Moore ending 31st September, 2021.
Trading A/C as on 31ST SEPTEMBER, 2021
Particulars Amount (DR.) Particulars Amount (CR.)
To opening stock
To Purchases(110000)
Less: purchase returns(720)
To carriage inwards
To wages & salaries
To motor expenses
18000
109280
890
14000
1400
By Sales(9500)
Less: sales return(3500)
By Closing Stock
By carriage outwards
By gross loss
6000
13000
500
107870
TOTAL 123730 TOTAL 123730
Profit & Loss A/C as on 31ST SEPTEMBER, 2021
Particulars Amount (DR.) Particulars Amount (CR.)
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To Gross loss
To rent
To telephone charges
To insurance
To office expenses
To sundry expenses
107870
7000
830
1030
800
250
To net loss 117780
TOTAL 117780 TOTAL 117780
(b) Based on the income statements of previous year predict that whether the company will attain
profits or losses in the year 2022.
From the above given data of B Moore financial statements, it can be seen that the business
organization have been experiencing heavy amount of losses since the year 2020. The novel
corona virus has affected the business organization on a serious note, the impact of which is
clearly seen in the year 2020 with a dramatic loss of 65,400. Also for the year 2021 the business
is still facing huge amount of losses which is visible in the above income statement of the
company (Wiatt, 2019). But for the year 2022, the situation may get better if the company adapt
the new and different changes which have come in the marketplace in the post corona phase.
Situations are getting back to normal which will help the business organization to get back on
track with high amount of sales along with the increment in profits of the company (Petkov,
2020). Once the situation in the marketplace are normalized, it will automatically have an
positive impact on the functioning and workings if the company. Therefore, it is predicted that
the business of B Moore will come back on a stable situation with profits in the year 2022.
References
Books & Journals
Bradlow, D. D. and Finkelstein, J. G., 2018. Negotiating business transactions: an extended
simulation course. Wolters Kluwer.
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Søgaard, J. S., 2021. A blockchain-enabled platform for VAT settlement. International Journal
of Accounting Information Systems, 40. p.100502.
Downer, P., Cooper, T. and Faseruk, A., 2018. Accounting, Taxation, and Auditing Issues
Following the Legalization of Recreational Marijuana in Canada: Learning from the
American Experience. Journal of Accounting & Finance (2158-3625), 18(6).
Drew, J., 2019. What's' critical'for CPAs to learn in an Al-powered world. Journal of
Accountancy, 227(5). pp.20-24.
Wiatt, R. G., 2019. From the mainframe to the blockchain. Strategic Finance, 100(7). pp.27-35.
Petkov, R., 2020. Prehistorical attempts of accounting in the Magura Cave, present day
Bulgaria. International Journal of Economics and Accounting, 9(2). pp.118-131.
Ballou, B., Heitger, D. L. and Stoel, D., 2018. Data-driven decision-making and its impact on
accounting undergraduate curriculum. Journal of Accounting Education, 44. pp.14-24.
Appelbaum, D. and Nehmer, R. A., 2020. Auditing cloud-based blockchain accounting
systems. Journal of Information Systems, 34(2). pp.5-21.
(Bradlow and Finkelstein, 2018)(Søgaard, 2021)(Downer, Cooper, and Faseruk, 2018)(Drew,
2019)(Wiatt, 2019)(Petkov, 2020)(Ballou, Heitger and Stoel, 2018)(Appelbaum and Nehmer,
2020)
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