Finance Assignment: Business Structures, Accounting and Financials

This finance assignment provides a comprehensive overview of business organizations, including sole proprietorships, partnerships, and corporations, highlighting their advantages. It delves into the users of accounting information, such as owners, suppliers, and lenders, and their respective needs for financial statements. The assignment then presents journal entries for S. Keyes & Co., detailing various transactions recorded in June 2019, followed by the creation of ledgers, a trial balance, an income statement for the year ending September 30, 2019, and a statement of financial position as of the same date. These financial statements showcase the company's financial performance and position, including revenues, expenses, assets, and liabilities.

FINANCE

TABLE OF CONTENTS
Part 1................................................................................................................................................1
Different types of business organizations and advantages of business structure........................1
Users of accounting information.................................................................................................1
PART 2............................................................................................................................................2
PART 3............................................................................................................................................3
Transaction in books of S.Keyes & Co. as on 30 June 2019......................................................3
PART 4............................................................................................................................................7
a) Income Statement of S Keyes for year ending 30th September 2019......................................7
b) Statement of Financial Position as at 30th September 2019....................................................7
REFERENCES................................................................................................................................9

Part 1
Different types of business organizations and advantages of business structure
There are different sort of organizations namely sole proprietorship, partnership and
corporation. Advantages of these firms in respect to business structure are given below. Sole proprietorship: Sole proprietorship refers to the business that is operated by any
specific individual (Burns and Dewhurst, J. eds., 2016). In such kind of business either
there is owner himself who manage the business or there are two more individuals that
assist one in running business. Advantage and disadvantage of sole proprietorship are
given below.
Advantage
 Entire profit is earned by the owner of business and he does not need to share it with any
other person. However, negative point is that one has to bear entire business risk with
limited available resources.
 Business firm does not need to follow many rules and regulations because business is
carried out at small scale. Partnership: It is type of business under which multiple people together work and
invested in specific proportion in the business. Thus, resources are shared by the
investors. Advantage of partnership are given below.
 Main benefit of partnership is that risk is shared among partners. In partnership business
in agreed ratio all investors share profit and loss as well as resources in the business.
 It is flexible part of the business (Hartmann, and et.al., 2016).
 Corporation: It is large corporate where multiple people are owner of the company.
Advantage is given below.
 Ownership can be transferred.
 Profit and loss earned and loss by firm not by any individual.
Users of accounting information Owner: Owner need IS and BS to make expense control and business expansion related
decisions.
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 Supplier: They need BS and IS to identify whether firm will be able to pay them debt
amount on time (Users of financial statements., 2018). Lender: They need both statements in order to decide whether to pay debt to the business
firm.
PART 2
Journal Entries for recording the transactions in books of S. Keyes & Co.
Journal Entries
Date Particulars Debit Credit
01/06/19 Van 2696
To Pressed Garages 2696
( Being van purchased on credit
from Pressed Garages)
03/06/19 Bad Debts 50
To K. Patel 50
(Being bed debt written off for due
from K.Patel)
08/06/19 Past Time ltd 400
To Office Fixtures 400
(Being office fixtures returned to
Past Time Ltd)
12/06/19 Bank 100
Bad Debts 60
To Q Hanson 160
(Being settlement of Q Hanson a/c)
14/06/19 Drawings 100
To Inventory 100
(Being goods drawn by owner)
28/06/19 Capital a/c 50
To Insurance 50
(Being insurance debited for
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personal expense reversed)
28/06/19 Machinery 650
To Electronics R Us 650
(Being machinery purchased on
credit)
PART 3
Transaction in books of S.Keyes & Co. as on 30 June 2019
a) Journals and Ledgers
Journal Entries
Date Particulars Debit Credit
02/06/19 Van 3700
To Bank 3700
05/06/19 Office Fixtures 850
To Office Hand ltd 850
08/06/19 Van 2 3600
To Draycarts ltd 3600
12/06/19 Cash 90
To Bank 90
15/06/19 Office Fixtures 60
To Cash 60
19/06/19 Dray Carts ltd 3600
To Bank 3600
21/06/19 Cash 2500
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To Loan (Y Henry) 2500
25/06/19 Bank 200
To Cash 200
30/06/19 Office Fixtures 340
To Bank 340
Ledgers
Bank
Date Particulars amount Date Particulars amount
01/06/19 To bal b/d 7500 02/06/19 Van 3700
25/06/19 To Cash 200 12/06/19 Cash 90
19/06/19 DrayCarts ltd 3600
30/06/19 Office Fixtures 340
30/06/19 To bal c/d 30
7730 7730
Cash
Date Particulars amount Date Particulars amount
12/06/19 To Bank 90 15/06/19 Office Fixtures 60
21/06/19
To Loan (Y
Henry) 2500 25/06/19 Bank 200
30/06/19 By bal c/d 2330
2590 2590
Van
Date Particulars amount Date Particulars amount
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02/06/19 To Bank 3700
30/06/19 By bal c/d 3700
3700 3700
Van 2
Date Particulars amount Date Particulars amount
08/06/19 To Draycarts ltd 3600
30/06/19 By bal c/d 3600
3600 3600
Office Fixtures
Date Particulars amount Date Particulars amount
05/06/19
To Office Hand
ltd 850
15/06/19 To Cash 60
30/06/19 To Bank 340
30/06/19 By bal c/d 1250
1250 1250
Dray Carts ltd
Date Particulars amount Date Particulars amount
19/06/19 To Bank 3600 08/06/19 Van 2 3600
3600 3600
Loan (Y
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Henry)
Date Particulars amount Date Particulars amount
21/06/19 Cash 2500
30/06/19 To bal c/d 2500
2500 2500
Office Hand ltd
Date Particulars amount Date Particulars amount
05/06/19 Office Fixtures 850
30/06/19 By bal c/d 850
850 850
b) Trial Balance
Trial Balance as on 30
June 19
S.No Headings Debit Credit
1 Bank o/d 30
2 Cash 2330
3 Van 3700
4 Van 2 3600
5 Office Fixtures 1250
6 Loan (Y Henry) 2500
7 Office Hand ltd 850
8 Capital 7500
Total 10880 10880
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PART 4
a) Income Statement of S Keyes for year ending 30th September 2019.
Income statement as at 31 September
Revenues
Sales 400000
less returns 2000 398000
Total Revenues 398000
Expenses
Cost of goods sold 245400
Carriage inwards 810
Motor expenses 1500
Carriage outward 2400
Rent 4000
Telephone charges 540
Wages and salaries 21000
Insurance 750
Office Expenses 400
Sundry Expenses 200
Total Expenses 277000
Net Income 121000
b) Statement of Financial Position as at 30th September 2019.
Statement of Financial Performance as at 30
September 2019
ASSETS
Non Current Assets
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Van 21000
Fixtures and fittings 18000
Current Assets
Accounts receivables 52000
Inventory 40000
Cash in hand 3500
Cash at bank 9000
Total Assets 143500
LIABILITIES
Non Current Liabilities
Current Liabilities
Creditors 12000
Shareholder's equity
Capital 25000
Less: drawings 14500 10500
Retained Earnings 121000
Total Liabilities 143500
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REFERENCES
Books and journals
Burns, P. and Dewhurst, J. eds., 2016. Small business and entrepreneurship. Macmillan
International Higher Education.
Hartmann, P.M. and et.al., 2016. Capturing value from big data–a taxonomy of data-driven
business models used by start-up firms. International Journal of Operations & Production
Management. 36(10). pp.1382-1406.
Online
Users of financial statements., 2018. [Online]. Available through:<
https://www.accountingtools.com/articles/users-of-financial-statements.html>.
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