Business Transactions: Financial Statement Analysis & Recording
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This report provides a detailed analysis of recording business transactions, starting with the steps to start a business in the UK decoration industry and identifying key decision-makers in a company like ASDA. It includes the preparation of journal entries, ledger accounts, and a trial balance for F Polk's business. Furthermore, the report computes the income statement for B Moore, a sole trader, for the year ended 31st September 2021, revealing a net loss. The analysis extends to a review of the company's profit/loss trend from 2013 to 2022, highlighting fluctuating performance and the impact of the pandemic on recent losses. The report concludes by emphasizing the importance of these accounting processes for understanding a business's financial health.

RECORDING BUSINESS
TRANSACTIONS
TRANSACTIONS
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Table of Contents
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................3
1...................................................................................................................................................3
2...................................................................................................................................................4
PART B...........................................................................................................................................4
(1) Passing Journal Entries with narrative in the book of F Polk................................................4
(2) Preparation of Ledger a/c and trial balance of ABC Enterprise............................................6
(a).................................................................................................................................................6
(b)...............................................................................................................................................12
(3)...............................................................................................................................................12
(a) Computation of Income Statement of B Moore Sole trader for the year ended 31st
September, 2021........................................................................................................................12
b.................................................................................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES................................................................................................................................1
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................3
1...................................................................................................................................................3
2...................................................................................................................................................4
PART B...........................................................................................................................................4
(1) Passing Journal Entries with narrative in the book of F Polk................................................4
(2) Preparation of Ledger a/c and trial balance of ABC Enterprise............................................6
(a).................................................................................................................................................6
(b)...............................................................................................................................................12
(3)...............................................................................................................................................12
(a) Computation of Income Statement of B Moore Sole trader for the year ended 31st
September, 2021........................................................................................................................12
b.................................................................................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES................................................................................................................................1

INTRODUCTION
Recoding business transaction is related with obtaining the significant information for
decision making process. The current report will highlight information regarding steps for
starting business and identifying the crucial stakeholders of decision making process. The current
study will give emphasis on having details journal entries, ledger, trial balance and income
statement. This will pay attention on assessing profitability or loss for the upcoming year.
PART A
1
In the UK there are several steps which are required to be followed for starting a new
business. In the decoration industry, there are several steps which are needed to be
focused by David Green in respect to achieve the profitability and flexibility to function
in sector. The steps that are needed to be followed are as follows:
The one of the crucial step is researching a new business name for starting the business as
decorator in the mentioned sector. Name play important role in establishing the brand
image in market (Urbański, Haque and Oino, 2019).
Evaluating legal structure paly important role in deciding the continuation of further steps
so that writing new business plan can become possible. In this it has been identified that
David Green will adopt the structure of sole proprietor.
Securing fund & finance in order to check the ability to decide level of operational
effectiveness David can derive can be evaluated in this stage.
Making effectual advertising strategy in respect to attract customer by making them
aware about the type of services offered so that generating higher revenue can become
possible.
Buying new insurance for business, working for paying tax as sole proprietor through
registering with HMRC & submitting an annual self-assessment.
Creating system for book keeping business record and maintaining appropriate guidelines
can help in formulating and establishing the business as decorator. These mentioned
course of action can help in achieving the objective of David green to operate as
decorator in the sector by eliminating irrelevant complications which may arise in
absence of following mentioned steps. these are the steps which are important for
Recoding business transaction is related with obtaining the significant information for
decision making process. The current report will highlight information regarding steps for
starting business and identifying the crucial stakeholders of decision making process. The current
study will give emphasis on having details journal entries, ledger, trial balance and income
statement. This will pay attention on assessing profitability or loss for the upcoming year.
PART A
1
In the UK there are several steps which are required to be followed for starting a new
business. In the decoration industry, there are several steps which are needed to be
focused by David Green in respect to achieve the profitability and flexibility to function
in sector. The steps that are needed to be followed are as follows:
The one of the crucial step is researching a new business name for starting the business as
decorator in the mentioned sector. Name play important role in establishing the brand
image in market (Urbański, Haque and Oino, 2019).
Evaluating legal structure paly important role in deciding the continuation of further steps
so that writing new business plan can become possible. In this it has been identified that
David Green will adopt the structure of sole proprietor.
Securing fund & finance in order to check the ability to decide level of operational
effectiveness David can derive can be evaluated in this stage.
Making effectual advertising strategy in respect to attract customer by making them
aware about the type of services offered so that generating higher revenue can become
possible.
Buying new insurance for business, working for paying tax as sole proprietor through
registering with HMRC & submitting an annual self-assessment.
Creating system for book keeping business record and maintaining appropriate guidelines
can help in formulating and establishing the business as decorator. These mentioned
course of action can help in achieving the objective of David green to operate as
decorator in the sector by eliminating irrelevant complications which may arise in
absence of following mentioned steps. these are the steps which are important for
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accomplishing in order to operate successfully in the decorator sector y maintaining the
competitive advantages.
2
ASDA is one of the company that is listed on London Stock Exchange and operates in
international level. There are several types of stakeholders who are connected with company in
order to assess performance so that significant decision can be made (Zorn and et.al., 2018).
Accounting play crucial role in recording, analysing and summarizing the financial details of
company. There are various types of accounting specialist who take this information for making
decisions. This comprises accountant, manager, genera & assistant manager, financial analyst,
etc.
There are internal and externa stakeholders who pay attention on having significant
information about ASDA so that different forms of decision can be made. The internal
stakeholders who refers to this statements involves employees, management and owner.
Management & owner utilizes to ensure that higher productive results are made. On the other
side, external stakeholders such as investors, creditor, financial institutions, suppliers,
competitor, etc. focus on gaining details of company (Kamaluddin, Ishak and Mohammed,
2019). Investor give emphasis on deriving information such profitability capacity of offering
return on investment, etc. so that favourable decision can be made. Creditor, financial
institutions, supplier can obtain insights that dealing with company is beneficial or not. On the
basis of this, it can be interpreted that these are stakeholders that have interest in company’s
performance and focus on using the stated statements in turn better decision can be made.
PART B
(1) Passing Journal Entries with narrative in the book of F Polk
Date
(2021)
Particulars Debit (£) Credit (£)
competitive advantages.
2
ASDA is one of the company that is listed on London Stock Exchange and operates in
international level. There are several types of stakeholders who are connected with company in
order to assess performance so that significant decision can be made (Zorn and et.al., 2018).
Accounting play crucial role in recording, analysing and summarizing the financial details of
company. There are various types of accounting specialist who take this information for making
decisions. This comprises accountant, manager, genera & assistant manager, financial analyst,
etc.
There are internal and externa stakeholders who pay attention on having significant
information about ASDA so that different forms of decision can be made. The internal
stakeholders who refers to this statements involves employees, management and owner.
Management & owner utilizes to ensure that higher productive results are made. On the other
side, external stakeholders such as investors, creditor, financial institutions, suppliers,
competitor, etc. focus on gaining details of company (Kamaluddin, Ishak and Mohammed,
2019). Investor give emphasis on deriving information such profitability capacity of offering
return on investment, etc. so that favourable decision can be made. Creditor, financial
institutions, supplier can obtain insights that dealing with company is beneficial or not. On the
basis of this, it can be interpreted that these are stakeholders that have interest in company’s
performance and focus on using the stated statements in turn better decision can be made.
PART B
(1) Passing Journal Entries with narrative in the book of F Polk
Date
(2021)
Particulars Debit (£) Credit (£)
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Sep.1 Van a/c
Fixture a/c
Stock a/c
Debtors a/c
Bank a/c
Cash a/c
To Creditors a/c
To Capital a/c (b/f)
(Being all opening balance of accounts
recorded)
5700
2800
5200
416
1060
85
309
14942
Sep 1 Bad-debt expenses a/c
To P Mullen a/c
(Being P Mullen a debtors was written
off as bad-debt)
105
105
Sep 5 Syme Limited a/c
To office fixtures a/c
(Being office fixture returned to creditor
Syme Ltd)
150
150
Sep 10 Cash a/c
P&L a/c
To M. Abel a/c
(Being only part payment is received
from the debtor M. Abel)
180
131
311
Sep 18 Machinery a/c
To Cash a/c
To bank a/c
To Brown Limited a/c
(Being machinery was purchased by
owner on both cash and credit basis)
1800
100
500
1200
Sep 26 Brown limited a/c
To Bank a/c
600
600
Fixture a/c
Stock a/c
Debtors a/c
Bank a/c
Cash a/c
To Creditors a/c
To Capital a/c (b/f)
(Being all opening balance of accounts
recorded)
5700
2800
5200
416
1060
85
309
14942
Sep 1 Bad-debt expenses a/c
To P Mullen a/c
(Being P Mullen a debtors was written
off as bad-debt)
105
105
Sep 5 Syme Limited a/c
To office fixtures a/c
(Being office fixture returned to creditor
Syme Ltd)
150
150
Sep 10 Cash a/c
P&L a/c
To M. Abel a/c
(Being only part payment is received
from the debtor M. Abel)
180
131
311
Sep 18 Machinery a/c
To Cash a/c
To bank a/c
To Brown Limited a/c
(Being machinery was purchased by
owner on both cash and credit basis)
1800
100
500
1200
Sep 26 Brown limited a/c
To Bank a/c
600
600

(Being half debt of Brown limited is
paid by sole trader F Polk)
Sep. 28 Insurance expense a/c
Drawing a/c
To Bank
(Being personal and business insurance
expense was paid by owner)
60
70
130
(2) Preparation of Ledger a/c and trial balance of ABC Enterprise
(a)
Ledger A/c
For the year month ending 31st August, 2021
paid by sole trader F Polk)
Sep. 28 Insurance expense a/c
Drawing a/c
To Bank
(Being personal and business insurance
expense was paid by owner)
60
70
130
(2) Preparation of Ledger a/c and trial balance of ABC Enterprise
(a)
Ledger A/c
For the year month ending 31st August, 2021
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Office Fixture A/c
Date Particulars Debit (£) Date Particulars Credit (£)
1/8/2021 To balance b/d 1200 31/08/2021 By balance c/f 5460
5/8/2021
To cash a/c 1000
To Sharp office Ltd a/c 2400
15/08/2021 To cash a/c 110
28/028/2021 To bank a/c 750
Total 5460 Total 5460
31/08/2021 To balance b/d 5460
Bank A/c
Date Particulars Debit (£) Date Particulars Credit (£)
1/8/2021 To balance b/d 36800 3/8/2021 By cash in hand a/c 2800
Date Particulars Debit (£) Date Particulars Credit (£)
1/8/2021 To balance b/d 1200 31/08/2021 By balance c/f 5460
5/8/2021
To cash a/c 1000
To Sharp office Ltd a/c 2400
15/08/2021 To cash a/c 110
28/028/2021 To bank a/c 750
Total 5460 Total 5460
31/08/2021 To balance b/d 5460
Bank A/c
Date Particulars Debit (£) Date Particulars Credit (£)
1/8/2021 To balance b/d 36800 3/8/2021 By cash in hand a/c 2800
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2/8/2021 To Loan (Santander Bank) a/c 12400 4/8/2021 By van a/c (second hand) 6200
25/08/2021 To cash in hand a/c 430 5/8/2021 By office fixture a/c 1000
19/08/2021 By Toyota Co. 8700
28/08/2021 By office fixture a/c 750
31/08/2021 By balance c/f 30180
Total 49630 Total 49630
31/08/2021 To balance b/d 30180
Cash in hand A/c
Date Particulars Debit (£) Date Particulars Credit (£)
3/8/2021 To bank a/c 2800 15/08/2021 By office fixture a/c 110
25/08/2021 To cash in hand a/c 430 5/8/2021 By office fixture a/c 1000
19/08/2021 By Toyota Co. 8700
28/08/2021 By office fixture a/c 750
31/08/2021 By balance c/f 30180
Total 49630 Total 49630
31/08/2021 To balance b/d 30180
Cash in hand A/c
Date Particulars Debit (£) Date Particulars Credit (£)
3/8/2021 To bank a/c 2800 15/08/2021 By office fixture a/c 110

25/08/2021 By bank a/c 430
31/08/2021 By balance c/f 2260
Total 2800 Total 2800
31/08/2021 To balance b/d 2260
Toyota Co. A/c
Date Particulars Debit (£) Date Particulars Credit (£)
19/08/2021 To bank a/c 8700 8/8/2021 By van a/c 8700
Total 8700 Total 8700
Capital A/c
Date Particulars Debit (£) Date Particulars Credit (£)
31/08/2021 To balance c/f 70000 1/8/2021 By balance b/d 70000
Total 70000 Total 70000
31/08/2021 By balance c/f 2260
Total 2800 Total 2800
31/08/2021 To balance b/d 2260
Toyota Co. A/c
Date Particulars Debit (£) Date Particulars Credit (£)
19/08/2021 To bank a/c 8700 8/8/2021 By van a/c 8700
Total 8700 Total 8700
Capital A/c
Date Particulars Debit (£) Date Particulars Credit (£)
31/08/2021 To balance c/f 70000 1/8/2021 By balance b/d 70000
Total 70000 Total 70000
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31/08/2021 By balance b/d 70000
Van A/c
Date Particulars Debit (£) Date Particulars Credit (£)
1/8/2021 To balance b/d 32000 31/08/2021 By balance c/f 46900
4/8/2021 To Bank a/c (second-hand van) 6200
8/8/2021 To Toyota Co. a/c 8700
Total 46900 Total 46900
31/08/2021 To balance b/d 46900
Loan A/c (Santander Bank)
Date Particulars Debit (£) Date Particulars Credit (£)
Van A/c
Date Particulars Debit (£) Date Particulars Credit (£)
1/8/2021 To balance b/d 32000 31/08/2021 By balance c/f 46900
4/8/2021 To Bank a/c (second-hand van) 6200
8/8/2021 To Toyota Co. a/c 8700
Total 46900 Total 46900
31/08/2021 To balance b/d 46900
Loan A/c (Santander Bank)
Date Particulars Debit (£) Date Particulars Credit (£)
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31/08/2021 To balance c/f 12400 2/8/2021 By Bank a/c 12400
Total 12400 Total 12400
31/08/2021 By balance b/d 12400
Sharp Office Ltd. A/c
Date Particulars Debit (£) Date Particulars Credit (£)
31/08/2021 To balance c/f 2400 5/8/2021 By office fixtures a/c 2400
Total 2400 Total 2400
31/08/2021 By balance c/f 2400
Total 12400 Total 12400
31/08/2021 By balance b/d 12400
Sharp Office Ltd. A/c
Date Particulars Debit (£) Date Particulars Credit (£)
31/08/2021 To balance c/f 2400 5/8/2021 By office fixtures a/c 2400
Total 2400 Total 2400
31/08/2021 By balance c/f 2400

(b)
Trial Balance
As at 31st August, 2021
Particulars Debit Credit
Office fixture a/c 5460
Bank a/c 30180
Cash in hand a/c 2260
Toyota co. a/c -
Capital a/c 70000
Van a/c 46900
Loan a/c 12400
Sharp office limited a/c 2400
Total 84800 84800
(3)
(a) Computation of Income Statement of B Moore Sole trader for the year ended 31st September,
2021
Particulars Details Amount (£)
Sales Revenue 95000
Less Sales returned -3500
Total sales revenue 91500
Less Cost of Sales:
Opening stock 18000
Add Purchase – purchase return
(110000 – 720) 109280
Add Carriage Inward 890
Less closing Inventory -13000
115170
Trial Balance
As at 31st August, 2021
Particulars Debit Credit
Office fixture a/c 5460
Bank a/c 30180
Cash in hand a/c 2260
Toyota co. a/c -
Capital a/c 70000
Van a/c 46900
Loan a/c 12400
Sharp office limited a/c 2400
Total 84800 84800
(3)
(a) Computation of Income Statement of B Moore Sole trader for the year ended 31st September,
2021
Particulars Details Amount (£)
Sales Revenue 95000
Less Sales returned -3500
Total sales revenue 91500
Less Cost of Sales:
Opening stock 18000
Add Purchase – purchase return
(110000 – 720) 109280
Add Carriage Inward 890
Less closing Inventory -13000
115170
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