Analyzing Financial Records: Journal, Ledger, and Income Statement

This assignment focuses on recording business transactions, including journal entries, ledger accounts, and the creation of an income statement. It covers the steps involved in starting a decorating company, identifies top management roles in accounting for a London Securities Exchange-listed company, and provides practical exercises involving F Polk's journal entries, Maurice Brothers' ledger accounts, and B Morre's income statement. The impact of the COVID-19 pandemic on income is also discussed. Desklib offers a platform to explore similar solved assignments and past papers for students.

Recording business
transactions

Contents
INTRODUCTION ..........................................................................................................................1
PART A...........................................................................................................................................1
Explain the steps involved in starting a fresh decorator company...............................................1
Explain the top management in charge of accounting for a company listed on the London
Securities Exchange.....................................................................................................................2
PART B............................................................................................................................................3
1. Record the journal entries in the F Polk books........................................................................3
2. Make the ledger accounts in the books of Maurice and brothers............................................4
3. Create a income statement for B Morre...................................................................................6
b) Explain how, in consideration of the COVID–19 outbreak, income for the year 2022 could
be increased or decreased ............................................................................................................7
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Recording of the business transactions is one of the most important aspect in the
prospective life of the company as it is related with the financing and its related aspects like
sourcing and arranging of funds so that the company can operate in an impactful and effective
manner (Anayochukwu and Ndubueze, 2013). There are a number of aspects that are included in
this report which covers all the aspects of the financial as well as income statement of the firm
which further includes its journal, ledger, trial balance and other remaining aspects which
possess a lot of value in the market for the company and thus can prove beneficial in the long
run as well if taken in an elaborated manner. Apart from that a decorative business that is started
by David Green is also discussed in an elaborated manner in this report and also two other firms
that is B Moore and F Polk's business venture is also discussed in a detailed way which further
provides a lot of clarity towards this aspects as a whole.
PART A
Elaborate and discuss the ways in which a decorating company can be started from a scratch and
thus has been done by David Green
David Green is an entrepreneur who is very enthusiastic and with a lot of zeal towards the
business venture that has been started by him that is of a decorating firm and thus it can be said
that though there are a lot of difficulties as well as challenges in front of David Green but still it
can be said that there are a number of opportunities that are in front of the person as the business
can fetch a lot of great opportunities in the near future and there are a lot of widen scope for the
business in terms of growing and expanding in the industry in which it is planning to operate as
there are a lot of customers that are able and willing to take the services of the firm and that too
in a regular manner (Chavis, Klapper and Love, 2011). Also there are a lot of aspects in which
David Green must take proper guidance and measures well before operating so that it can prove
useful for him as well as the company in the long run because there are many factors as well as
elements like latest trends, preference and tastes of the individual's that are living in a particular
geographical area and it also varies from region to region and thus it can be said that there must
be a detailed analysis and evaluation of all the aspects so that it can add value to the firm in the
long run. Also there are a lot of factors that possess a lot of value and thus has been discussed in
an elaborated manner below-

 Making connections that are of great importance- Each and every firm that is
operational in the market must obey and adhere to all the rules and regulations that are
made by the government in terms of the environmental factors so that it can add to the
value of the company by giving it an upper hand in the market and also it can assist the
enterprise to improve its value in the eyes of the customers. David Green must adhere to
all the aspects so that it can gain customers in the industry by making its product and
services more inclined towards the customers and thus it should focus on making the firm
customer friendly rather than profit oriented and thus it can help the company as a whole.
 Digital marketing- In the today's world there is a lot of scope of digital marketing and
thus a company can gain a lot of advantage of the same if it is used in an impactful
manner by exploiting its full potential as it can give the firm an upper hand by connecting
it to a large number of clients and that too in a very short period of time. David Green can
also use this aspect of digital marketing to its advantage as its a new business of
decorative items and thus can operate in a very less operating capital and this is one of
the factors that can help the company to reach a large number of customers in a brief
period of time and thus can prove advantageous to the firm in the long run scenario
(Cope, Piche and Walter, 2012).
 Developing a strategic influence- Their must be a strategic decision making in the firm
so that it can help the company in taking quick decisions and can help in saving the
excess time that can be used and at times is just wasted due to elaborate working
procedure and due to the complexities of the firm. David Green as stated is starting a
business and is a sole owner of the company and thus it can be said that it must make
quick decisions so that all the choices that are selected can be directed towards the
implementation of the goal and thus can lead towards the prosperity of the business as a
whole. Apart from that it helps in gaining an upper hand in the market as decisions are
taken rather quickly as compared to other firms in general so all the trends and patterns
can be deciphered in an effective and efficient manner (Quirke, 2017).
 Creating a plan of management- Each and every firm that is operational in the market
must make a plan which is feasible and practical enough so as to take the company to
great heights so that it can achieve its goals and objectives in an effective and efficient
manner that are made at the starting of the enterprise. Also important aspects like the raw

materials and basic details of the company must also be analysed in a manner that can
assist the company in establishing its mark on the business as a whole. David Green must
focus on creating a team of experts so that it can help in the overall growth and
development of the company while thoroughly analysing and evaluating its basic aspects
like turnover, quality, features, etc. so that an overall makeshift of the firm can be made
which can sustain and survive in the market for a longer time period in the industry in
which it is operational (Duarte and Cruz-Machado, 2013).
Elaborate the upper executive accounting in-charge for the firm that is listed on the securities
exchange of London
Accountancy is the process of analysing, recording, and summarising all the operations
that a company does in a financial year so that an overall elaborated analysis of the same can be
so as to evaluate the profit and loss and detailed overview of the working of the company in the
long run (Porter, 2011). Sainsbury is a company headquartered in London and is operating on a
wide scale and thus is listed as well in London stock exchange and also there are a number of
individu8als that are interested in the financial and accounting statements of the company and
thus are explained below in detail-
 Management as they are directly related with the company.
 Shareholders as they are the owners of the firm.
 Investors as they have invested their hard earner money in the company.
 Creditors as they have given cash or resources to the company for the usage purpose
(Higgins, Omer and Phillips, 2015).
PART B
1. Record the journal entries in the F Polk books.
JOURNAL ENTRIES – F POLK
Date Particulars Debit Credit
01/09/21 Assets A/c
Fixtures
Stock
Debtors (105 + 311)
5700
2800
5200
416

Bank
Cash
Creditors (229 + 80)
Capital
1060
85
309
14952
01/09/21 Bad Debts
P Mullen
(Bad Debts written-off)
105
105
05/09/21 Syme Ltd
Office Fixtures
(Office fixtures bought through credit was written-off)
150
150
10/09/21 Bank
Bad Debts
M Abel
(M Abel declared bankruptcy and received the amount
in full settlement)
180
131
311
18/09/21 Machinery
Cash
Bank
Brown Ltd
(Purchased a machinery and the amount paid by
cheque, cash and on credit)
1800
100
500
1200
26/09/21 Brown Ltd
Bank
(Half of the amount due paid through cheque)
600
600
28/09/21 Insurance Expenses
Drawings
Bank
(Insurance expenses paid by bank but later realised that
£70 is of personal house)
60
70
130

2. Make the ledger accounts in the books of Maurice and brothers.
a) GENERAL LEDGER – MAURICE BROTHERS
Cash Account
Date Particulars Ref Amount Date Particulars Ref Amount
03/08/21 Bank 2800 15/08/21 Office Fixtures 110
19/08/21 Toyota Co. 8700
31/08/21 Balance c/d 6440 25/08/21 Bank 430
9240 9240
Bank Account
Date Particulars Ref Amount Date Particulars Ref Amount
03/08/21 Cash 2800
01/08/21 Capital 36800 04/08/21 Van 6200
25/08/21 Cash 430 05/08/21 Office Fixtures 1000
02/08/21 Loan Payable 12400 28/08/21 Office Fixtures 750
31/08/21 Balance c/d 38880
49630 49630
Van Account
Date Particulars Ref Amount Date Particulars Ref Amount
01/08/21 Capital 32000
04/08/21 Bank 6200 31/08/21 Balance c/d 46900
08/08/21 Toyota Co. 8700
46900 46900
Office Fixtures

Date Particulars Ref Amount Date Particulars Ref Amount
01/08/21 Capital 1200
05/08/21 Bank 1000
05/08/21 Sharp Office Ltd 2400 31/08/21 Balance c/d 5460
15/08/21 Cash 110
28/08/21 Bank 750
5460 5460
Sharp Office (Creditor)
Date Particulars Ref Amount Date Particulars Ref Amount
31/08/21 Balance c/d 2400 05/08/21 Office Fixtures 2400
2400 2400
Toyota Co. Accountable
Date Particulars Ref Amount Date Particulars Ref Amount
19/08/21 Cash 8700 08/08/21 Van 8700
8700 8700
Loan Payable Account
Date Particulars Ref Amount Date Particulars Ref Amount
31/08/21 Balance c/d 12400 02/08/21 Bank 12400
12400 12400
Capital Account
Date Particulars Ref Amount Date Particulars Ref Amount
31/08/21 Office Fixtures 1200

31/08/21 Van 32000 31/08/21 Balance c/d 70000
31/08/21 Bank 36800
70000 70000
b) Trial Balance
TRIAL BALANCE
Maurice & Brothers
Debit Credit
Bank 38880
Cash 6440
Van 46900
Office Fixtures 5460
Sharp Office Ltd (Creditor) 2400
Loan Payable 12400
Capital 70000
TOTAL 91240 91240
3. Create a income statement for B Morre
Particulars Amount (£)
Sales 95000
Less: Sales Returns 3500
Less: Carriage Inwards 890
Net Sales (A) 90610
Opening Stock 18000
Purchases 110000
Less: Return Outwards 720
Less: Closing Stock 13000
Net Purchases (B) 114280

Motor Expenses 1400
Rent 7000
Telephone Charges 830
Wages and Salaries 14000
Insurance 1030
Office Expenses 800
Sundry Expenses 250
Operating Expenses (C) 25310
TOTALS (A – B - C) -48980
b) Elaboration of the effect of the pandemic that is COVID-19 on the income for the year and
analysing its rise or fall as a whole
The pandemic is one of the most dangerous situation that a firm has encountered in the
recent past and thus it is very crucial for each and every company that is operating in the market
to analyse and evaluate the upcoming trends so that it can lead to the increased preparation of
something else which can happen in the future (Klettner, Clarke and Boersma, 2014). As all the
economies were shut and non operational in the pandemic and thus it can be said that it caused a
lot of trouble for every business firm and each sector was under great distress due to the
situation. The income of most of the businesses were on a declining mode and thus the economy
would need a lot of time to recuperate from the situation in general.
CONCLUSION
It can be concluded from the above that there are a number of different factors that
possess a lot of value and thus has to be analysed and evaluated in a very precise manner so that
it can help the firm in increasing its value in the market and thus can stand ahead of all of its
competitors that are operational in the market for a longer time period.

REFERENCES
Books and Journals
Anayochukwu, A.V. and Ndubueze, N.A., 2013. Potentials of optimized hybrid system in
powering off-grid macro base transmitter station site.
Chavis, L.W., Klapper, L.F. and Love, I., 2011. The impact of the business environment on
young firm financing. The world bank economic review. 25(3). pp.486-507.
Cope, E.W., Piche, M.T. and Walter, J.S., 2012. Macroenvironmental determinants of
operational loss severity. Journal of Banking & Finance. 36(5). pp.1362-1380.
Duarte, S. and Cruz-Machado, V., 2013. Modelling lean and green: a review from business
models. International Journal of Lean Six Sigma. 4(3). pp.228-250.
Higgins, D., Omer, T. C. and Phillips, J. D., 2015. The influence of a firm's business strategy on
its tax aggressiveness. Contemporary Accounting Research. 32(2). pp.674-702.
Klettner, A., Clarke, T. and Boersma, M., 2014. The governance of corporate sustainability:
Empirical insights into the development, leadership and implementation of responsible
business strategy. Journal of Business Ethics. 122(1). pp.145-165.
Porter, M. E., 2011. Competitive advantage of nations: creating and sustaining superior
performance (Vol. 2). Simon and Schuster.
Quirke, B., 2017. Making the connections: using internal communication to turn strategy into
action. Routledge.