Comprehensive Accounting Assignment: Quick-Pick Delivery Services

This accounting assignment provides a comprehensive analysis of Quick-Pick Delivery Services' financial transactions and performance. The solution begins with detailed journal entries documenting various transactions, followed by the creation of T-accounts to illustrate the movement of cash, capital, service revenue, and other relevant accounts. A trial balance is then constructed to ensure the equality of debits and credits, which is followed by the preparation of an income statement to determine the company's profitability. Adjustment entries are provided to accurately reflect the financial position at the end of the accounting period, and a post-closing trial balance is included. The assignment concludes with an interpretation of the financial statements, highlighting the company's strong financial position and potential for growth. The analysis covers key financial statements such as income statement and balance sheet, with a focus on profitability and financial health.

Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
Q1. Journal entry....................................................................................................................1
Q2. T-accounts of Quick-pick delivery services....................................................................2
Q3. Trail balance....................................................................................................................5
Q4. Income statements ..........................................................................................................5
Q5 Entry adjustment...............................................................................................................6
Q6: Journal entry for adjustment............................................................................................8
Q7 Post trail balance...............................................................................................................9
Q8: Interpretation ..................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Accounting is an important aspects of financial system. It is used to keep proper record of
financial transaction which are performed by the company during the year (DRURY, 2013). The
understanding of various statement such as Journal, ledger, trail balance, income statement and
balance sheet.
Q1. Journal entry
Date Particulars Amount(DR) Amount(CR)
1 Cash A/c
Truck A/c
To Capital A/c...
(Being company is stated its operation by cash and truck)
$6000
$11,000
$17,000
2 Supplies A/c..
To Cash A/c...
( Being $300 Cash is paid to supplies)
$300
$300
3 Prepaid Insurances A/c..
To cash A/c...
(Advance insurance paid)
$700
$700
4 Accounts receivables A/c..
cash A/c.
To service revenue A/c..
(Delivery service are paid in cash and rest are transfer to
accounts receivable.)
$700
$800
$1500
5 Accounts receivables A/c
To Service revenue A/c
(Customers are using the services)
$1500
$1500
6 Salary A/c...
To Cash A/c...
$700
$700
1

(Being employee are paid cash in form of salary)
7 Cash A/c..
To Service revenue A/c
(Delivery services received cash of 12000)
$12000
$12000
8 Cash A/c..
To Unearned service revenue A/c...
(Advance cash is collected from unearned services)
$600
$600
9 Cash A/c..
To Accounts receivables A/c...
(Cash received from customers)
$1500
$1500
10 Fuel Expenses A/c..
To accounts payable A/c..
(Being payment for fuel is made with credit card)
$200
$200
11 Accounts receivables A/c ..
To Service revenue A/c...
(services are made in credit)
$900
$900
12 Rent A/c..
To Cash A/c..
(Being rent paid in cash)
$600
$600
13 Accounts payable A/c..
To Cash A/c..
(Cash made to creditor)
$200
$200
14 Drawings A/c...
To Cash A/c..
(Cash withdrew for personal use)
$2100
$2100
Q2. T-accounts of Quick-pick delivery services
Cash Accounts
2

Date Particulars Amount $ Date Particulars Amount $
To Capital A/c 6000 By Supplies 300
To service revenues A/c 12000 By Drawings 2100
To accounts receivable 1500 By rent 600
To Unearned service
revenue
600 By Salary payable 700
To service revenues A/c 800 By Accounts payable 200
By insurance premium 700
By Balance C/d 16300
20900 20900
Capital Account
Date Particulars Amount $ Date Particulars Amount $
By Truck A/c 11000
By Cash A/c 6000
To balance c/d 17000
17000 17000
Truck Accounts
Date Particulars Amount $ Date Particulars Amount $
1 To Capital A/c 11000
By balance c/d 11000
11000 11000
Accounts payables
Date Particulars Amount $ Date Particulars Amount $
1 By Fuel expenses 200
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2 To cash 200
Drawing account
Date Particulars Amount $ Date Particulars Amount $
1 To cash 2100
By Balance C/d 2100
2100 2100
Service revenue
Date Particulars Amount $ Date Particulars Amount $
1 By Account receivable 1500
By cash 12000
By Account receivable 700
By cash 800
By Accounts receivable 900
To balance c/d 15900
15900 15900
Prepaid insurances
Date Particulars Amount $ Date Particulars Amount $
1 To cash 700
By balance c/d 700
700 700
Salary
Date Particulars Amount $ Date Particulars Amount $
1 To cash 700
By Balance c/d 700
4

700 700
Unearned service
Date Particulars Amount $ Date Particulars Amount $
By cash 600
To balance c/d 600
600 600
Accounting receivable
Date Particulars Amount $ Date Particulars Amount $
To service revenues 1500 By cash 1500
To service revenues 700
To service revenues 900
By balance C/d 1600
3100 3100
Rent Accounts
Date Particulars Amount $ Date Particulars Amount $
1 To cash 600
By Balance C/d 600
600 600
Supplies accounts
Date Particulars Amount $ Date Particulars Amount $
1 To cash 300
By balance C/d 300
Fuel Expenses
Date Particulars Amount $ Date Particulars Amount $
5

1 To accounts payables 200
By Balance C/d 200
200 200
Q3. Trail balance
Trail balance as on 31st January 2017
Particulars Debit Credit
Cash 16300
Fuel expenses 200
Rent expenses 600
Supplies 300
Accounts receivable 1600
salary 1400
Drawing accounts 2100
Prepaid insurance 450
Truck accounts 10940
Depreciation 60
Insurance account 250
Capital 17000
Service revenues 16400
Unearned service revenues 100
Salary payable 700
Total 34200 34200
Q4. Income statements
Income statement for Quick pick service's for the month ended 31st January 2017
Particulars Amount $
A. Income earn
Service revenues 16400
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Total 16400
B. Expenses incurred
Rent expenses 600
Fuel expenses 200
Salary 1400
Depreciation 60
Insurance account 250
Total expenses 2510
Net profit (A – B) 13890
Balance sheet as on 31st January2017
Amount $
Assets
Current assets
Cash 16300
Prepaid insurance 450
Accounts receivables 1600
Supplies 300
Total current assets 18650
Non-current assets 10940
Total assets 29590
Liabilities
Current liabilities
Salary payable 700
Unearned services revenues 100
Total CL 800
Equity
Capital 17000
Drawing (2100)
Net profit 13890 28790
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Total liabilities and equity 29590
Q5 Entry adjustment
Adjustment entries:
Date Particulars Amount(DR) Amount(CR)
a. Salary A/c..
To Salary payable A/c
$700
$700
b. Depreciation expense A/c
To Truck A/c
$60
$60
c. Insurances A/c
To Prepaid insurance A/c
$ 250
$250
d. No need to pass any entry 0 0
e. Unearned service revenue A/c
To Service revenue A/c
$500
$500
Salary account
Date Particulars Amount $ Date Particulars Amount $
1 To salary payables 700
By Balance C/d 700
700 700
Unearned service Accounts
Date Particulars Amount $ Date Particulars Amount $
1 To services revenue 500
By Balance C/d 500
500 500
Truck Accounts
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Date Particulars Amount $ Date Particulars Amount $
By Depreciation a/c 60
To Balance C/d 60
60 60
Salary payable Accounts
Date Particulars Amount $ Date Particulars Amount $
By Salary account 700
To Balance C/d 700
700 700
Insurances Accounts
Date Particulars Amount $ Date Particulars Amount $
1 To Prepaid insurance 250
By Balance C/d 250
250 250
Service Revenues Accounts
Date Particulars Amount $ Date Particulars Amount $
By Unearned Service 500
To Balance C/d 500
500 500
Depreciation Accounts
Date Particulars Amount $ Date Particulars Amount $
1 To Truck 60
By Balance C/d 60
60 60
Insurance prepaid Accounts
9

Date Particulars Amount $ Date Particulars Amount $
By Insurance 250
To balance C/d 250
250 250
Q6: Journal entry for adjustment
Date Particular L.F Debit Credit
Service revenues A/c
To income statements A/c
(Closing entry for revenue accounts with 16400)
$16400
$16400
Income statements A/c..
To Fuel expenses A/c
To Rent expenses A/c
To Salary expenses A/c
To Insurance account A/c
To depreciation A/c
( Being entry made for closing expenses)
$2510
$200
$600
$1400
$250
$60
Income statements A/c (16400-2510)
To capital A/c
( transfer to capital accounts)
$13890
$13890
Capital accounts A/c
To Drawing A/c
(Being drawings transfer to capital accounts)
$2100
$2100
Q7 Post trail balance
Post -closing trail balance as on 31st January 2017
Particulars Debit Credit
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Salary payable 700
Unearned service revenues 100
Capital 28790
Cash 16300
Prepaid insurance 450
Truck accounts 10940
Supplies 300
Accounts receivable 1600
Total 29590 29590
Q8: Interpretation
According to the above project report, it has been seen financial report of Quickpick
service are more impressive. It is clearly indicate that the financial position of company are more
at strong side as they want to expand their business operations (Dechow and et. al. 2011). There
net earnings are more enough to start new venture. They have sufficient amount of cash to meet
out all the debts of company. Profitability positions of the company are showing effective sign in
order enhance its business as they are having $13890 as net profit (profitability, 2017). The
chances of growth and existences are more superior and they would get more chance to earn
maximum profit.
Profitability ratios: It is used to determine the company performances through using
various ratios such as gross profit margin and operating margin and ROA etc. It help to identify
profitability position of a company whether they are having sufficient amount of cash to meet out
its debts and start a new venture.
Gross profit margin: It provide information about the profitability of Qucikpick services
product and services. It is tell that total cost incur to produce a product.
Gross margin: Gross profit / Net sales *100
: 14200/16400*100
: 86%
Working note:
Gross profit: Total sales- (Rent+ fuel+ salary)
:16400- (600+200+1400)= 14200
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Net profit ratios: It is said to be profitability ratio which is used to identify relationship among
net profit after tax and total net sales. To calculate:
Net profit ratio : Net profit after tax / Net sales *100
: 9723 /16400 *100
: 59.28%
Working note:
Net profit after tax calculation
Assumption of tax @ 30%
=13890*30%= 4167
=13890 - 4167=9723
Efficiency ratios: It refers as those ratios which is analyse in order to know about how a
company is managing its assets and liabilities at internal level. It is mainly compute the total
turnover of receivable, usages of equity and other aspects.
ROA: Return on assets measures information regarding company assets as how effectively
generate income for its assets.
ROA: Net income / Assets *100
: 16400 /29590*100
: 55.4%
Return on sales: It provides information regarding total sales percentage of income generated
during the year. It also determine whether the sale is available to retain as earning for further
investment. It is computed by using formula:
ROS: Net income / Sales *100
: 13890 /16400 *100
: 85%
Return on equity: It determine that how much a company is making for each dollar that an
investors invest into their business. Formula for calculating:
ROE: Net income / capital *100
: 13890 /17000*100
: 81.7%
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