Business Transactions: Recording, Analysis and Financial Statements

This report provides a comprehensive analysis of recording business transactions and their impact on financial statements. It includes journal entries, ledger accounts, a trial balance, an income statement, and a statement of financial position. A letter to Linda addresses concerns about drawings and their effect on the organization's capital. The report also computes and analyzes key financial ratios such as gross profit ratio, net profit ratio, current ratio, and quick ratio to assess the company's profitability, liquidity, and efficiency. A comparison with competitors and an evaluation of the impact of COVID-19 on the company's performance are also included, concluding that the company maintains good financial health despite external challenges. Desklib provides access to this and many other solved assignments.

Recording Business
Transactions

TABLE OF CONTENTS
ASSESSMENT 2.............................................................................................................................1
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
a) Journal entries are as below:..............................................................................................1
b) Ledger accounts for getting opening balance is shown as following:...............................4
c) Trial Balance has 31st October 2020.................................................................................11
d) Income Statement for the period ended 31st October 2021.............................................12
e) Statement of Financial Position as at 31st October 2021.................................................13
f) Letter To Lind regarding concern for drawings................................................................13
PART B..........................................................................................................................................14
a) computing ratios for Anne’s business for October 2021..................................................14
b) Analysing performance of company by comparing and impact of Covid 19..................16
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

ASSESSMENT 2
INTRODUCTION
Recording business transaction is concerned with possessing the step to examine the
particular practice that has impact on specific account. It helps in gaining information regarding
the particular processing so that sound business decision. The current report will pay attention
on assessing the significant information regarding journal entries, ledger, trial balance, income
& financial position. Present report will give emphasis on having relevant details by conducting
ratio analysis in turn comparison of financial performance of enterprise can be done.
PART A
a) Journal entries are as below:
1

2

3

b) Ledger accounts for getting opening balance is shown as following:
Bank A/c
Date Particulars J.F Amount (£) Date Particulars J.F
Amount
(£)
01/10/21 To capital 10000 04/10/21 By Computer A/c 800
05/10/21 To sales A/c 2800 04/10/21 By Printer A/c 200
21/10/21 To Rent A/c 800 24/10/21 By Laptop A/c 1700
26/10/21 By Wages A/c 820
30/10/21
By Rent of office
flat A/c 850
31/10/21
By Withdrawal
A/c 1200
31/10/21 By Balance c/d 8030
Total 13600 Total 13600
Cash A/c
Date Particulars J.F Amount Date Particulars J.F Amount
4

(£) (£)
01/10/21
To capital
A/c 4800 12/10/21 Repairs of printer A/c 110
23/10/21 To sales A/c 1800 31/10/21 By Balance c/d 7340
23/10/21 To sales A/c 700
31/10/21
To Rayan
A/c 150
Total 7450 Total 7450
Flat A/c
Date
Particular
s J.F
Amount
(£) Date Particulars J.F
Amount
(£)
01/10/21 To capital 45000
31/10/2
1 By Balance c/d 45000
Total 45000 Total 45000
Capital A/c
Date
Particular
s J.F
Amount
(£) Date Particulars J.F
Amount
(£)
31/10/21
To Balance
c/d 71800 01/10/21 By Bank A/c 10000
01/10/21 By Cash A/c 4800
01/10/21 By flat A/c 45000
01/10/21 By car A/c 12000
5

Total 71800 Total 71800
Furniture A/c
Date
Particular
s J.F
Amount
(£) Date
Particul
ars J.F
Amount
(£)
02/10/21
To Home
Ltd A/c 5400 18/10/21
By
Home
Ltd A/c 250
31/10/21
By
Balance
c/d 5150
Total 5400 Total 5400
Home Ltd A/c
Date
Particular
s J.F
Amount
(£) Date
Particular
s J.F
Amount
(£)
18/10/21
To
furniture
A/c 250 02/10/21
Furniture
A/c 5400
31/10/21
To Balance
c/d 5150
Total 5400 Total 5400
Laptop A/c
6

Date
Particular
s J.F
Amount
(£) Date
Particular
s J.F
Amount
(£)
24/10/21
To bank
A/c 1700 31/10/21
By
Balance
c/d 1700
Total 1700 Total 1700
Rent A/c
Date
Particular
s J.F
Amoun
t (£) Date Particulars J.F
Amount
(£)
30/10/21
To bank
A/c 850 31/10/21 By Balance c/d 850
Total 850 Total 850
Computer A/c
Date
Particular
s J.F
Amount
(£) Date Particulars J.F
Amount
(£)
04/10/21
To bank
A/c 800
31/10/2
1 By Balance c/d 800
Total 800 Total 800
Printer A/c
7

Date
Particular
s J.F
Amoun
t (£) Date Particulars J.F
Amount
(£)
04/10/21
To bank
A/c 200 31/10/21 By Balance c/d 200
Total 200 200
Sales A/c
Date
Particular
s J.F
Amount
(£) Date Particulars J.F
Amount
(£)
31/10/21
To Balance
c/d 5600
05/10/2
1 By Bank A/c 2800
23/10/2
1 By cash A/c 1800
23/10/2
1 By Rayan A/c 300
23/10/2
1 cash A/c 700
Total 5600 Total 5600
Repairs of printer A/c
Date
Particular
s J.F
Amoun
t (£) Date Particulars J.F
Amount
(£)
12/10/21 to cash A/c 110 31/10/21 By Balance c/d 110
8

Total 110 110
Rent A/c
Date
Particular
s J.F
Amount
(£) Date Particulars J.F
Amount
(£)
31/10/21
To Balance
c/d 800
21/10/2
1 By Bank A/c 800
Total 800 800
Rayan A/c
Date
Particular
s J.F
Amount
(£) Date Particulars J.F
Amount
(£)
23/10/21
To sales
A/c 300 31/10/21 cash A/c 150
31/10/21 By Balance c/d 150
Total 300 Total 300
Wages A/c
Date
Particular
s J.F
Amount
(£) Date Particulars J.F
Amount
(£)
26/10/21
To bank
A/c 820 31/10/21 By Balance c/d 820
9

Total 820 Total 820
Withdrawal A/c
Dr. Cr.
Date
Particular
s J.F
Amount
(£) Date Particulars J.F
Amount
(£)
31/10/21
To bank
A/c 1200 31/10/21 By Balance c/d 1200
Total 1200 Total 1200
Car A/c
Date
Particular
s J.F
Amount
(£) Date
Particular
s J.F
Amount
(£)
01/10/21
To capital
A/c 12000 31/10/21
By
Balance
c/d 12000
Total 12000 12000
10