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Aims of project.Page 2 Data Sheet......Page 3 Description of Business .Page 4 Transactions...Page 5 Source Documents: Purchases invoice...Page 6 Sales invoice...

Page 8 Credit notePage 10 ChequePage 11 Receipt......Page 12 Books of original entry: General Journal.... Page 13 Sales Journal Page 14 Purchases Journal Page 15 Returns inwards Journal..Page 16 Cash Book..Page 17 Ledgers: Sales Ledger Page 18 Purchases Ledger Page 19 General Ledger .Page 20 Trial BalancePage 22 Final Accounts: Trading and Profit and Loss AccountPage 23 Balance SheetPage 24 Statement of PerformancePage 25 Further Analysis and Interpretation of Financial Statements Ratios: Profitability RatiosPage 26 Liquidity Ratios.Page 27 Efficiency RatiosPage 28 ComparisonsPage 31 ConclusionPage 32 RecommendationsPage 33 Appendices: PicturesPage 34 Organizational Charts..Page 35

This project aim is: 1. To formulate the source documents, journals and ledger accounts essential for the recording of transactions for November 2016.

Name of Business: La Dimples Fashion Line Short History Of Business: (see description of business) Location: Lower Park Range Avenue, Port Zante Reason for location: (see description of business) Ownership of business: Partnership Size of staff: seventeen (see description of business for more details) Type of business: Retailer Business activities sold: clothes, shoes, accessories (see description of business for more details) Period of review: one month Frequency of reporting: monthly Documents used: sales invoice, purchases invoice, cash receipt, cheque, credit note and debit note

Journals and accounting records used: General journal, sales journal return inwards journal and return outwards journal, three column cash book. Liquidity ratios used Current ratio Acid test ratio Efficiency ratios Rate of stock turnover Debtors collection period (debtors to sales ratio) Creditors payment (Creditors to purchases ratio)

La Dimples Fashion Line is yet to be the clothing store of the century. Bringing you all of the state-ofthe-art designs that can also be personalized such as miniskirts, halter tops, tank tops and all denims, shoes and both fashion and real accessories. This business focuses mainly on teens and pre-teens ages 12-19. This is because they have money to spend freely acquired from savings, allowances, etc. and the items they buy are largely luxury. Also they make many, if not most, of their purchasing decisions independently and they have significant influence on family purchases. La Dimples Fashion Store opens just the right time from 8-4 and is located at just the right place which is Lower Park Range Avenue, north east of Port Zante and left of Shoppers Complex, upstairs the old police building. This sole trader business, owned by Shanika Joshua runs on a staff of 9. The owner, who is also the designer and accountant of the business, one manager, four seamstresses and tailors, two cashiers and two cleaners. The business will successfully start with $50,000.00 capital which was acquired from the owners savings and a loan from the development bank.

Transactions for the month of November, 2011. Date Nov 1 Nov 3 Nov 5 Nov 8 Nov 9 Nov 10 Nov 11 Nov 12 Nov 14 Nov 15 Nov 18 Nov 22 Nov 23 Nov 29 Transactions Started business with $25000 in bank and $25000 cash Bought stock from Jim Jones Trading Ltd. $16000 on credit Bought vehicle from T.D.C $20000 on credit Bought clothing racks from Mabel Supplies $16000 on credit Sold personalized T-shirts to J. Hankins on credit $1000 Took $200 out of the bank and put into cash till Sold $6000 goods on credit to K. James Received Cheque from J. Hankinsn$1000 Sold miniskirts in bulk to Il et Elle Kids Fashion on credit $1200 Bought $700 goods on credit from Silver Lee Caines Il et Elle Kids Fashion returned goods to us $400 Paid electricity by cash $1800 Sold goods on credit to P. Johnson Paid salaries by cash $15500

Date:- 05/ 11/ 11

Fort Street, Basseterre, St. Kitts


(869) 465- 8998 Tdc@caribsurf.skb.com La Dimples Fashion Line Lower Park Range avenue, Basseterre, St. Kitts Phone:- 869-465-1988

Invoice:- 9871

Description Ford Focus (vehicle)

Amount $20000.00

Subtotal Tax Total

$20000.00 $0.00 $20000.00

Thank you for your business

INVOICE
Mabel
DATE: 8 November, 2011 100

supplying your every electronic need

INVOICE #

Canyon Street Basseterre BILL TO: Shanika Joshua La Dimples Fashion Line Lower Park Range Avenue Basseterre

DESCRIPTION

AMOUNT

$ Clothing racks 16,000.00

$ SUBTOTAL vat 16,000.00 0

Make all checks payable to Mabel

THANK YOU FOR YOUR BUSINESS!

$ TOTAL 16,000.00

Invoice 0001

5/11/2016

To: J. Hankins, Stylish Kids Fashion Store, Cayon St, Basseterre, St. Kitts Quantity
8

La Dimples Fashion Line Lower Park Range Avenue, Basseterre, St. Kitts Phone: 869-465-1988 www.Fashion 4evry1.com

Description
Blue personalised t- shirts for boys with company logo(small) Multicoloured Personalised T- shirts with company logo(smll) Pink peronalised T-shirts for girls with company logo(medium)

Unit Price
$ 25.00

Total
$ 200.00

15

$ 40.00

$ 600.00

$ 25.00

$ 200.00

Make all checks payable to LE NYLON LTD.

THANK YOU FOR YOUR BUSINESS!

INVOICE: 0001
` $ 1000.00

Please make all cheques payable to La Dimples Fashion Line Thank you for your business!

Invoice 0001

5/11/2016

To: J. Hankins, Stylish Kids Fashion Store, Cayon St, Basseterre, St. Kitts

La Dimples Fashion Line Lower Park Range Avenue, Basseterre, St. Kitts Phone: 869-465-1988 www.Fashion 4evry1.com

Quantity
8

Description
Blue personalised t- shirts for boys with company INVOICE: 0001 logo(small) Multicoloured Personalised T- shirts with company logo(smll) Pink peronalised T-shirts for girls with company logo(medium)

Unit Price
$ 25.00

Total
$ 200.00

15

$ 40.00

$ 600.00

$ 25.00

$ 200.00

$ 1000.00

Please make all cheques payable to La Dimples Fashion Line Thank you for your business! 9

credit note
La Dimples Fashion Line Lower Park Range Avenue Basseterre, St. Kitts

Date: 10/11/16

Il et Elle Kids Fashion, Princes Street, Basseterre, St. Kitts Credit against Order no. 8748 Invoice no. 0002
Description
Miniskirts sizes 10-14 Charged 48 @ $25.00 Return inwards 16 @ $25.00 $1200.00 $400.00

Total

Price to be paid 32 @ $25. 00

$800.00

Please make all cheques payable to La Dimples Fashion Line Thank you for your business!

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LA DIMPLES FASION LINE

No.
DATE______/________/_______

Lower Park Range Ave. Basseterre, St. Kitts Tel: 869-466-1988


Pay to the Order of___________ __________________________________________

$ DOLLARS

St. Kitts, Nevis and Anguilla NATIONAL BANK LIMITED Basseterre, St. Kitts, W. I 09837:87263:

_________________________________

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Receipt
Date_____________________ No. ________
Amount $________________

Description Charged to Received by Approved by

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GENERAL JOURNAL
DATE NOV 1 NOV 1 NOV 1 DETAILS BANK CASH CAPITAL ASSETS AND LIABILITIES AT THIS DATE TO BE ENTERED IN TO OPEN THE BOOK FOLIO GL5 GL6 GL7 DEBIT 25000 25000

Pg1 CREDIT

50000

NOV 5

NOV 8

VEHICLE T.D.C BOUGHT VEHICLE ON CREDIT CLOTHING RACKS MABEL SUPPLIES BOUGHT CLOTHING RACKS ON CREDIT

GL8

20000 20000

GL9

1600 1600 36000 36000

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Sales journal
Pg1 DATE NOV 9 NOV 11 NOV 14 NOV 23 NOV 30 J. HANKINS K. JAMES IL ET ELLE KIDS FASHION P. JOHNSON TRANSFER TO SALES LEDGER DETAILS FOLIO SL1 SL1 SL1 SL1 GL INVOICE NO 0000 0001 0002 0003 AMOUNT 1000 6000 1200 600 8800

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Purchases journal
Pg1 DATE NOV 3 NOV 8 NOV 30 JIM JONES SILVER LEE CAINES TRANSFER TO PURCHASES LEDGER DETAILS FOLIO PL1 PL1 GL INVOICE NO 746 876 AMOUNT 16000 700 16700

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Return inwards journal


Pg1 DATE NOV 18 NOV 30 DETAILS IL ET ELLE KIDS FASHION TRANSFER TO RETURN INWARDS A/C FOLIO SL1 GL1 DEBIT CREDIT 400 400

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Cash book
Pg1 Date Nov 1 Nov 10 Nov 12 Details Capital Bank J. Hankins Folio GL1 c SL1 Disc. Allowed $ Cash 25000 200 1000 $ Bank $ 25000 Date Nov 10 Nov 22 Nov 29 Nov 30 25200 Dec 1 Balance b/d 7900 26000 26000 Details Cash Electricity Salaries Balance c/d Folio c Disc. Received

17

sales ledger
Pg1 J. Hankins Nov 9 sales SJ1 1000 Nov 12 1000 Discount allowed Bank 100 900 1000

Il Et Elle Kids Fashion Nov 14 sales SJ1 1200 Nov 18 Nov 30 1200 Dec 1 balance b/d 1200 return inwards balance c/d 400 800 1200

P. Johnson a/c Nov 23 sales SJ1 600 Nov 30 balance c/d 600

600 Dec 1 balance b/d 600

600

K. James a/c

Nov 11

sales

SJ1

6000

Nov 30

balance c/d

6000

6000 Dec 1 balance b/d 6000

6000

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Purchases ledger
Jim Jones a/c
Nov 30 balance c/d 16000 Nov 3 Dec 1 purchases balance b/d PJ1 16000 16000 Pg1

Silver Lee Caines a/c


Nov 30 balance c/d 700 Nov 5 Dec 1 purchases balance b/d PJ1 700 700

TDC a/c
Nov 30 balance c/d 20000 Nov 5 Dec 1 vehicle balance b/d PJ1 20000 20000

Mable supplies a/c


Nov 30 balance c/d 16000 19 Nov 8 Dec 1 clothing racks balance b/d PJ1 16000 16000

General ledger
Capital a/c Nov 30 Dec 1 balance c/d balance b/d GJ1 9000 9000 Nov 1 Nov 1 bank cash 25000 25000 50000

vehicle a/c Nov 5 Dec 1 TDC balance b/d GJ1 20000 20000 Nov 30 balance c/d 20000

Clothing racks a/c Nov 8 Dec 1 Mabel supplies balance b/d GJ1 16000 16000 Nov 30 balance c/d 16000

Electricity a/c Nov 22 Dec 1 cash balance b/d CB1 1800 1800 Nov 30 profit and loss a/c 1800

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Salaries a/c
Nov 29 Dec 1 cash balance b/d CB1 15500 15500 Nov 30 profit and loss a/c 15500

Pg2

Sales a/c Nov 30 total sales for the Nov 30 trading a/c 2200 month 2200

Purchases a/c

Nov 30 total sales for the


month 16000 Nov 30 trading a/c 16000

Return inwards a/c

Pg3

Nov 30 total return inwards


for the month 400 Nov 30 trading a/c 400

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Trial balance
La Dimples Fashion Line Trial balance As at November 30, 2011. Description Bank Cash Capital Vehicle Machinery Sales Purchases Debtors Creditors Return inwards Electricity Salaries Debit 25800 7900 20000 16000 8800 16000 7400 52700 400 1800 15500 111500 Credit

50000

111500

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Trading and profit and loss account


La Dimples Fashion Line Trading and profit and loss a/c As at November 30 2016

Description Sales Return inwards Net sales Cost of goods sold: purchases Closing stock Cost of goods sold Gross loss Expenses: Electricity Salaries Total expenses Net loss

$ 8800 400 8400

16700 600 16100 -7700 1800 15500 17300 -25000

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Balance sheet
La Dimples Fashion Line Balance sheet As at November 30 2016 Details Fixed assets Vehicle Current assets Debtors Bank Cash Total current assets Current liabilities Creditors Working capital Net current assets Finance by: Capital Net loss Capital at end Debit 20000 20000 7400 25800 7900 41100 Credit

52700 -11600 31600

50000 -25000 25000

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Liquidity Ratios:
(a) Current Ratio: Total Current Assets = 41100 = 1:0.8 Total Current Liabilities 52700 La Dimples Fashion line is at a critical position to pay its debts as it hardly has enough assets available to cover the business debts. That is, for every dollar that La Dimples Fashion line owes, it has less than $1.00 available.

(b) Acid Test Ratio: Total Current Assets Closing Stock = 41100 600 = 0.8:1 Total Current Liabilities 52700 La Dimples Fashion line has insufficient liquid resources available to cover its debts even after closing stock has been deducted from the business total current assets. Thus, for every dollar that La Dimples Fashion line owes, it has $0.80 available.

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3. Efficiency Ratios:
(a) Stock turn-over: Cost of goods sold = Average Stock 16100___ = 26.4 times 600

La Dimples Fashion line replenished its stock over twenty times during the period which means that business was rapid in this time.

(b) Debtors to Sales Ratio:

Average Debtors 30 Credit Sales X 1

700 2200

30 = 25.2 = 10 days 1

La Dimples Fashion line does not receive payments from its debtors as fast as it should, that is, every 25 days. This means that an unsteady flow of income is coming in to the business, which makes covering the business expenses very difficult.

(c) Creditors to Purchases Ratio: Average Creditors Credit Purchases X 30 1 = 37600 1600 X 365 = 1152 days = 96 months 1

La Dimples Fashion line takes 96 months to pay its creditors, which is much longer than it takes for the money to come into the business.

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Opening vs. Closing Capital

Opening Capital closing capital

La Dimples Fashion lines opening capital for the month was $50000.00. At the end of the period, a total of $25 000 was used hence the capital ended as $25 000.

27

Purchases vs.Sales

Purchases Sales

La Dimples Fashion lines Purchases for the month was $16700.00 and the total Sales was $8800.00.

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Series 1
Current Liabilities

Current assets

0% Series 1

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Current assets $41,100.00

Current Liabilities $52,700.00

La Dimples Fashion Lines current assets amounted to $41100.00, while the liabilities amounted to $52700.00.

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At the end of the month La Dimples Fashion Line made an unfortunate loss of -$25 000.00. However, although such a big loss was made, for a young and newly established business, it is not performing too poorly and as the owner I am planning to implement new cost-saving strategies in order to make higher profits.

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After the completion of this School Based Assessment, these are my conclusions: One mistake during the accounting process can throw ones business into various problems such as using single entry (instead of the double entry system), which leads to incomplete records. I was able to broaden my knowledge in Principles of Accounts and I will more efficiently use the skills gained in a future career that deals with accounting.

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La Dimples Fashion line needs to ensure that creditors are paid on time and at the same time encourage debtors of prompt payment in order to reduce the amount of money owed. They should ensure that the amount of money going out of the business is not more that the money coming into the business. This will aid in increasing profits as the business grows.

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OWNER(1)

MANAGER(1)

CASHIER(2)

MARKETING DEPT. (2)

ADVERTISING DEPT. (1)

CLEANERS(2)

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Mini skirts

denims

shirts

accessories

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