Report on GST Business Assignment

End-of-year-reporting for a
trading GST Business

Table of Contents
MAIN BODY.......................................................................................................................................3
Business Report...............................................................................................................................3
Accounting process..........................................................................................................................3
Interpretation of financial data.........................................................................................................6
Recommendations............................................................................................................................7
REFERENCES.....................................................................................................................................8

MAIN BODY
Business Report
As the per the data analysed, it can be stated that the company is performing in much better
manner as it is having 64.44% as its gross profit with its minimum inventory turnover of 4 days
(Furnham, Gunter and Drakeley, 2016). Also, it is having good debtors days of 10 days which
defines that the company is having enough cash with itself for meeting any obligations arising in the
coming future time frame or for any contingencies.
Accounting process
1. Journal entry
Date Particular Debit Amount (in $) Credit Amount (in $)
01/05/19 Cash A/c
To Accounts Receivable A/c
760
760
01/05/19 Insurance A/c
To Cash A/c
3000
3000
- Salaries A/c
To Outstanding office salaries A/c
10800
10800
- Accrued Commission A/c
To Commission A/c
473120
473120
Purchase A/c
To Supplier A A/c
To Supplier B A/c
To Supplier C A/c
To Supplier D A/c
To Supplier E A/c
500000
75000
90000
55000
150000
130000
2. Adjusted Trial Balance
Scuba Steve's Suppliers
Trial Balance
As on 30 June 2019
Particulars
Debit Amount
($)
Credit Amount
($)
Account payable 500000
Account receivable 64240
Advertising 10000
Bank -
Bank Charges 200
Buildings 675000
Bank overdraft 36630

Capital Suspense 213270
Cash in hand 790
Commission Revenue 59320
Cost of goods sold 400000
Delivery Vehicle Expenses 5000
Delivery Vehicles 30000
Electricity 3500
Furniture 15000
GST Cleaning PAYABLE 9500
Insurance 8000
Interest Expense 20000
Interest on Overdue Accounts 2000
Inventories 100000
Land 300000
Loan from A Sandler 70000
Mortgage on Buildings 285000
Motor vehicle expenses 1000
Motor vehicle 20000
Office expenses 4000
Office salaries 27700
Purchase 500000
Rates 4000
Rent Revenue 26000
Repair and Maintenance 500
Sales credit 250000
Sales 573570
Sales Return 20000
Sales Salaries 85000
Stationery 2000
Total 2128490 2128490
3. Profit and Loss statement
Profit and Loss Statement Amount ($)
Revenue 573570
Credit sales 250000
(less) Returns 20000
Other Income
(add) Commission Revenue 59320
(add) Interest on Overdue
Accounts 2000
(add) Rent Revenue 260000
Total net revenue 1124890
(less) Cost of goods sold 400000
Opening stock 80000
Gross Profit 724890
Expenses
(less) Advertising 10000
Bank Charges 200

Delivery Vehicle Expenses 5000
Electricity 3500
Motor vehicle expenses 1000
Rates 4000
Repair and Maintenance 500
Office expenses 4000
Office salaries 27700
Insurance 8000
Stationery 2000
Total Expenses 65900
Earning before Interest 658990
(less) Interest Expense 20000
Earning after Interest 638990
4. Balance Sheet
BALANCE SHEET
Particulars Amount ($)
Assets
Current Assets
Cash in hand 790
Inventories 100000
Debtors 250000
Account receivable 64240
Total Current Assets 415030
Non Current Assets
Buildings 675000
Delivery Vehicles 30000
Furniture 15000
Land 300000
Other 298360
Motor vehicle 20000
Total Non Current Assets 1338360
Total Assets 1753390
Current Liabilities
Account payable 500000
GST Cleaning PAYABLE 9500
Bank overdraft 36630
Total Current Liabilities 546130
Non Current Liabilities
Loan from A Sandler 70000
Mortgage on Buildings 285000
Total Non current liabilities 355000

Equity
Capital 213270
Profit 638990
Total Liabilities 1753390
5. Financial Ratio
Ratios Figure
Gross profit ratio = (Gross
Profit/Revenue from Operations) x
100
64.44%
Return on Assets (ROA) = Net
income/ Total assets 37.58%
Return on Equity = Net income/
Shareholders equity 308.99%
Debtors Day = (Average accounts
receivable/Annual total sales) * 365 10.4
Inventories turnover = cost of goods
sold/ average inventories 4
Interpretation of financial data
Following is the interpretation of financial data:
1. Return on Assets – This ratio helps in defining profitability aspect of the company. It can
determine how easily the company is earning income from the assets of the business in any
financial period. The term return on assets is defined as a measure which helps in defining
how effectively every business organisation has been able to generate profits as well as
income from the total amount of business assets available with the company (Foyeke, Iyoha
and Ojeka, 2015). It is considered as a very good ratio that such company is making use of
its business assets in an effective manner.
2. Return on Equity – It identifies the ability of the firm in earning income from the investment
made with the help of shareholders in the company. Thus, it can help shareholder in earning
profit. The ratio of 308.99% defines that company is performing outstanding in the market
with high customer as well as market share.
3. Debtors Day – It helps in ascertaining the average time period in which the company will be
able to receive its due amount (Epstein, Buhovac and Yuthas, 2015). The lesser the day is
considered as good as it defines that company is having enough cash for meeting its future

as well as business contingencies.
4. Gross profit ratio – It defines that how company is making profit with the help of available
business processes and operations. It states that how effectively the company is able to
convert its sales into profit margin. Here, the gross profit ratio is 64.44% which is
considered as one of the best aspect for the business as it defines that company is able to
converts its sales and goods easily into cash.
5. Inventories Turnover – It defines that whether company is capable enough to convert its
inventory into sales and then into cash. The lesser the number of inventories turnover day
defines that company is performing good enough in the market place.
Recommendations
It is highly recommended that:
1. Formulation of business plans and strategies is very much essential for every business
organisation to gain competitive advantages in the market place.
2. By conducting market research as well as survey, such firm can capture current market
opportunities as well as schemes for making improvement in its own performance level
(Böhm, Eggert and Thiesbrummel, 2017).
3. Also, by making use of business performance indicators such as benchmarking, key
performance indicators it can ascertain what all standards as well as norms has been
followed by other profit making companies which can be used by it in gaining competitive
edge in the market.

REFERENCES
Books and Journals
Böhm, E., Eggert, A. and Thiesbrummel, C., 2017. Service transition: A viable option for
manufacturing companies with deteriorating financial performance?. Industrial Marketing
Management. 60. pp.101-111.
Epstein, M. J., Buhovac, A. R. and Yuthas, K., 2015. Managing social, environmental and financial
performance simultaneously. Long range planning. 48(1). pp.35-45.
Foyeke, O. I., Iyoha, F. O. and Ojeka, S., 2015. Firm size and financial performance: A determinant
of corporate governance disclosure practices of Nigerian companies. Journal of Accounting
and Auditing: Research & Practice.
Furnham, A., Gunter, B. and Drakeley, R., 2016. Biodata (Routledge Revivals): Biographical
Indicators of Business Performance. Routledge.
Prajogo, D. I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International Journal of Production Economics. 171. pp.241-
249.
Usman, A. B. and Amran, N. A. B., 2015. Corporate social responsibility practice and corporate
financial performance: evidence from Nigeria companies. Social Responsibility Journal. 11(4).
pp.749-763.
Online
Debtors days ratio. 2019. [Online]. Available through: <https://www.wallstreetmojo.com/debtor-
days-formula/>.