Accounting Records for The Coffee Pot Cafe

The assignment is about preparing accounting records for Craig Butler's new cafe, The Coffee Pot Cafe, for its first three months. This involves creating general ledger accounts, receivables ledger accounts, and payables ledger accounts based on transactions such as initial investment, purchases, sales, operating expenses, and loan repayments.

Your client, Craig Butler, has recently opened a new café
and he has asked you to prepare the accounting records
for the first three months. This involves creating the
general, receivables and payables ledger accounts based
upon the information provided below:
  On 1 August 2016, Craig started the business by
paying £35,000 into a business bank account from
his personal savings. He then purchased the
following items by cheque:
Fixtures and fittings for cafe at cost £25,120
Kitchen equipment at cost £32,450
  Craig also obtained a business loan of £25,000,
which incurs annual interest at a rate of 4%. This
will be repayable in full in 10 years’ time.
The Coffee Pot Café has now been trading for 3 months.
Transactions for the first quarter are summarised below:
  SALES – Sales made to customers in the café are
recorded in an electronic till. The till provides totals
of daily sales. All monies are banked weekly and
therefore cash sales should be recorded directly in
the bank ledger account.
Craig has also negotiated two contracts to supply
lunches to a coach company and a canal boat
company. These sales are NOT recorded in the till

and are invoiced separately as both customers have
a credit agreement to pay, by electronic bank
payment, within 30 days after being invoiced.
Electronic till records for cash, debit card & credit card
sales:
Month Total Sales per till (£)
August 16,345
Septembe
r 24,672
October 27,589
Sales to customers on credit for the quarter;
Customer Total Sales Invoices
(£)
Total Receipts
(£)
Smith’s Coaches 8,950 5,965
Swan Canal
Boats 3,470 2,304
 PURCHASES – Craig makes two main types of
purchases - food supplies and other consumables. He
buys most of his food supplies on credit from Thomas
Foods Ltd, and most of the consumables on credit from
Catering Wholesalers Ltd. He also makes a small amount
of purchases via cheque/cash, which are recorded
directly in the bank ledger account.

Cheque/Cash purchases:
Month Total purchases –
food supplies (£)
Total purchases – other
consumables (£)
August 2,382 67
September1,495 198
October 1,963 243
1. Purchases from suppliers on credit for the quarter:
Suppliers Total Purchase
Invoices (£)
Paid (by
BACS) (£)
Thomas Foods Ltd 19,568 15,778
Catering
Wholesalers Ltd 6,834 4,144
During the quarter, Thomas Foods Ltd offered a cash
discount of 2% for early settlement. Craig had taken
advantage of this when making payments against his
account.
 OPERATING EXPENSES during the quarter (paid by
cheque, standing order, direct debit or BACS) have
been summarised as follows:
Expense Type Total Paid
(£)
Staff wages £18,249
Rent & business rates £8,065
Insurance £1,310
Loan Interest £250
Gas & electricity £874

Telephone &
broadband £420
Craig withdrew £2,800 each month from the bank for his
own wages.
PART 1
(Note: This part of the assignment can be undertaken
using Word or Excel, or can be hand- written and
scanned.)
Requirement:
Using the above information, you are required to
prepare the relevant general ledger accounts,
receivables ledger accounts and payables ledger
accounts to record the above transactions, balance
each account off and prepare a trial BALANCE at 31st
oct 2016.
All transactions/balances should be rounded to the
nearest £)