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Your client, Craig Butler, has recently opened a new café and

Added on - 16 Sep 2019

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Your client, Craig Butler, has recently opened a new caféand he has asked you to prepare the accounting recordsfor the first three months. This involves creating thegeneral, receivables and payables ledger accounts basedupon the information provided below:On 1 August 2016, Craig started the business bypaying £35,000 into a business bank account fromhis personal savings. He then purchased thefollowing items by cheque:Fixtures and fittings for cafe at cost £25,120Kitchen equipment at cost £32,450Craig also obtained a business loan of £25,000,which incurs annual interest at a rate of 4%. Thiswill 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 arerecorded in an electronic till. The till provides totalsof daily sales. All monies are banked weekly andtherefore cash sales should be recorded directly inthe bank ledger account.Craig has also negotiated two contracts to supplylunches to a coach company and a canal boatcompany. These sales are NOT recorded in the till
and are invoiced separately as both customers havea credit agreement to pay, by electronic bankpayment, within 30 days after being invoiced.Electronic till records for cash, debit card & credit cardsales:MonthTotal Sales per till(£)August16,345September24,672October27,589Sales to customers on credit for the quarter;CustomerTotal Sales Invoices(£)Total Receipts(£)Smith’s Coaches8,9505,965Swan CanalBoats3,4702,304PURCHASES– Craig makes two main types ofpurchases - food supplies and other consumables. Hebuys most of his food supplies on credit from ThomasFoods Ltd, and most of the consumables on credit fromCatering Wholesalers Ltd. He also makes a small amount
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