JEN’S SUPERMARKET

CXC Principles of Accounts

General Level
SBA Assignment
Summer 2010

Name: Jenevonne Kirton

Registration number:

School: The Lodge School

School code: 030016

Territory: Barbados
This project is about develop and promising entity, Jen’s Supermarket, under
review for December 2009

pg. 1
Table of Contents

Opening remarks……………………………………………………………………………………………………..….3-6
Acknowledgement……………..………………………………………………………….……………..….3
Aim of project………………………………………………………………………………………………..…4
Description and overview………………………………………………….…………………….……….5- 6
Accounting procedures used and records kept:…………………………………………..……….........7
Opening journal entries………………………………………………………..………………………….8
The General Journal…………………………………………………………………………….…..…...…9
Sales Journal………………………………………..……………………………….……………………..….15
Purchases Journal……………………………………………….………..…………………..….……..….15
Return Inwards Journal…………………………………………………………………………………...16
Return Outwards Journal……………………………………………….……………..………….…..…16
Three Column Cash Book…………………………………………………………………….…………..17
Sales Ledger……………………………………………………………………………………………….…...18-19
Purchases ledger………………………..……………………………………….…………………….…….20
General Ledgers……………………………………………..……………………………………….….…..21-23
The Trial Balance…………………………………………………..……………………………….………..24
Trading and Profit and Loss………………………………..…………………………………………...25
Balance Sheet………………………………………………………..…………………..……………..…….26
Performance Evaluation and interpretation of results……………………………..….…..……….27-29
Ratios………………………………………………………………………………………………….…..………27-29
Comparison…………………………………………………..………………………………….…….……...30
Suggestion……………………………………..……………………………………………….………….……31
Conclusion……………………………………………………………………………………….……….….…32
Appendices:
The List of the Transactions………………………………………………………………………..…..10-11
Source documents………………………………………………………………………….….…………….12-14
The accounting cycle……………………………………………………………………………..………..7
Pie charts ………………………………………………..……………………………………………………..28
Doughnut chart…………………………………………………………………………….………………..29

pg. 2
Acknowledgement

I would like to thank family and friends for all they contributed towards

taking Jen’s Supermarket from an idea and making it into an innovation. Thank

you to all who contributed money or any fixed assets into the entity to make

Jen’s Supermarket a success.

pg. 3
Aim of the Project

The aim of my project is for me to arrive at a comprehensive understanding

of the financial sector of the business world. To draw up the financial records for

the year 2009 for Jen’s Supermarket and to comment on the entity’s

performance using appropriate tools of Analysis

pg. 4
Description and Overview

Jen’s Supermarket is a developed and simulated entity owned by

Jenevonne Kirton, who is the sole proprietor. Jen’s Supermarket is a developed

supermarket which sells a variety of food items and miscellaneous goods,

serving most of the island in its convenient location.

The supermarket employ fifteen staff along with Ms. Kirton acting as

owner/manager. There are three supervisors and twelve general workers who

act as shelf stackers, cashiers, as assistance and security

The lines of authority within the business a shown below

pg. 5
 Owner/Manager

Supervisor Supervisor Supervisor

General Workers

The accounting records are kept on double entry principles, with all the

necessary journals, ledgers, a cash book, a petty cash book and a payroll to

record the cash and credit transactions of the entity. Jen’s Supermarket allows

some of their costumers to buy on credit and they also buy from many retailers

on credit.

The period under review is Dec 2009

Accounting procedures used and records kept

pg. 6
Jen’s Supermarket keeps records according to the standard form of double entry

principles and in keeping with the accounting cycle shown below.

The accounting Cycle

1. Journalising/
Books of
original entry

5. Final 2. Posting to
Accounts the ledger

4.Adjustments
and closing 3.Trial Balance
entries

Opening Journal Entries

pg. 7
Assets

Cash 1000
Bank 50000
Premises 100000
Motor Van 1500
Stock 50000

Debtors

C. Harris 1000
S. Clarke 5000
T. Thomas 300

Creditors

M. Song 5000
D. Call 1000

pg. 8
The General Journal

The General Journal p.5

Date Details Folio Debit Credit
2009 Assets        
1st Jan Premises Gl 64   100000  
  Motor Van Gl 63   1500  
  Stock Gl 55   50000  
         
  Debtors:      
  C. Harris Sl 44   1000  
  S. Clarke Sl 42   5000  
  T. Thomas Sl 50   300  
         
CB
  Bank 10   50000  
CB
  Cash 10   1000  
         
  Liabilities:      
  Creditors      
  M. Song     5000
  P. Call     1000
  Capital     202800
        208800 208800

List of Transactions

December 2009

pg. 9
Dec 1. Purchased goods on credit from U. Ulrich $50,000

2. Sold goods on credit to H. Hoyte costing 600

3. Cash Sales $100,000

4. Cash Drawings $1,000

5. Paid Rent and Rates by cheque $1,000

6. Credit Sales to M. Lung $450

9. H. Hung lent us $600 by cheque

12. M. Lung paid us by cheque $450

13. Repaid H. Hung $600 by cheque

14. Sold goods on credit to F. Frank $2000

15. Bought goods from R. Reid 1500

16. Paid insurance by cheque for $300

17. Paid wages by cheque $1,000

19. Paid for motor expenses $300 by cash

21. Sales on credit to G. Gooding $2,000

22. Goods returned from F. Frank $200

24. Returned faulty stock to U. Ulrich $100

26. Credit purchases from M. Thomas $ 1000

pg. 10
 28. Bought goods from I. Irish for $45

29. Paid R. Reid his account by cheque having a discount of 5%

30. H. Hoyte paid his account by cheque having a discount of 5%

Invoice

Invoice
no: 001      
Date: 14th/12/2009  
Jen's
Supermarket To: Frank
Haggat Hall Turning
From: St.Michael St. Michael  
   
QTY DESCRIPTION UNIT PRICE($) $  
25 Cases PHD: Milk 40 1000  
10 crates Sun flower: Eggs 15 150  
50 boxes Pampers: 17 850  

pg. 11
 Pampers
       
  Total   2000  
         

Debit Note:

DEBIT NOTE
   
Jen's
To: Supermarket From: U. Ulrich
Haggat Hall   Hinds Bury
St. Michael.   St. James
Barbados   Barbados
   
Ref
Date: 24th December 2009 No: Invoice No:005
   
QTY DESCRIPTION UNIT PRICE ($)   TOTAL AMOUNT($)  
5
cases BBC: Pep drinks 20 100
         

Credit Note:

Credit Note        
   
Jen's
From: Supermarket To: F. Frank
  Haggat Hall, Turning ,
  St. Michael, St. Michael,
  Barbados. Barbados.
   
Ref
Date: 22nd December 2009 No: Invoice No:010
  Dated 22nd Dec, 2009

pg. 12
    
UNIT PRICE TOTAL
QTY DESCRIPTION ($)   AMOUNT($)
5 buckets( 1 Gallon
each) Bico: Ice Cream 40 200
         

Receipt
:

Receipt        

Date:30th Dec 2009 # 001

   

Received from: H. Hoyte  

   

the sum of Five hundred and forty dollars  

   

For: wholesale goods  

$540.0
  0

Per: H. Hoyte      

Cheque:
J

  e
Barbados National Bank  312086  
  n BRIDGETOWN, ST. MICHAEL 2009/12/13  
  ‘ BARBADOS. YR/MO/DAY  
   
s
  pay to the  
Super

Market pg. 13
 $
  order of H. Hung bds 600.00
DOLLAR
  Six hundred----------------------- S
   
  Jks  
  Jenevonne Kirton
Owner/General
  BNB ACCOUNT   Manager

The Sales Journal

Sales Journal p.17

Invoice
Date Details No Folio Amount
2009       $
2nd H. Hoyte 001 SL 3 2000

pg. 14
 Dec
6th Dec M. Lung 002 SL 4 2000
14th
Dec F. Frank 003 SL 2 600
21st
Dec G. Gooding 004 SL 1 450
  Transferred to sales a/c   GL 21 5050

The Purchases Journal

Purchases Journal p.5

Date Details Invoice No Folio Amount
2009       $
1st Dec U. Ulrich  001  PL 5  50000
15th Dec R. Reid 004 PL 7 1500
26th Dec M. Thomas 002 PL 1 1000
28th Dec I. Irish 003 PL 2 45
 
  Transferred to purchases a/c   GL3 52545

The Return Inwards Journal

Return Inwards Journal

p.12
Invoice Foli Amoun
Date Details No o t
2009       $
22nd
Dec F. Frank 004 SL 3 200
  Transferred to Return Inwards   GL  

pg. 15
 a/c 21

The Return Outwards Journal

Return Outwards Journal

p.10
Invoice Foli Amoun
Date Details No o t
2009       $
24tn
Dec U. Ulrich 001 PL 5 100
Transferred to return outwards GL
  a/c   23  

The Cash Book

pg. 16
 Jen's Supermarket
Three column Cash Book (p.10)
Date Details Folio Dis Cash Bank Date Details Folio Dis Cash Bank
200
2009 9
Dec     $ $ $ Dec     $ $ $
1st bal b/d GJ 1   1000 50000 4th Drawings GL 12   1000  
10000
3rd Sales GL 10   0   5th Rent and Rates GL 14   1000
9th loan GL 16     600 16th Insurance GL 17   300
12th M. Lung SL 1     450 17th Wages GL 18   5000
30th H. Hoyte SL 7 60   540 19th Motor expenses GL 20   300  
            29th R. Reid PL 7 75 1425
            31st bal c/d     99 700 43865
10100 10100
      60 0 51590       75 0 51590
1st
Jan     GL 40 99700 43865       GL 39    

Sales Ledgers
      C. Harris     p.44
2009    
1st Dec bal b/d GJ 1 1000  
 

      S. Clarke      p.22
2009  

pg. 17
 1st Dec bal b/d GJ 1 5000  
 

      T. Thomas      p.11
2009  
1st Dec bal b/d GJ 1 300  
 

      F. Frank      p.3
2009 2009
14th Return
Dec Sales SJ 17 2000 22nd Dec Inwards RIJ 12 200
31st Dec bal c/d 1800
2000   2000
1st Jan bal b/d 1800  

      G. Gooding      p.4
2009  
21st
Dec Sales SJ 17 2000

 
      H. Hoyte      p.7
2009   2009
2nd Dec Sales SJ 17 600 30th Dec Bank CB 10 540
30th Dec Dis CB 10 60
600   600

      M Lung      p.1
2009   2009
6th Dec Sales SJ 17 450 12th Dec Bank CB 10 450

N.B Debtors=10100

pg. 18
Purchases Ledger
      U. Ulrich      p.5
2009 2009
24th Return Purchase
Dec Outwards ROH 10 100 2nd Dec s PJ 5 50000
31st
Dec bal c/d 49900  
50000   50000
1st Jan bal b/d 50000

pg. 19
       D. Call      p.50
1st Dec bal b/d GJ 1 1000
 
      M. Thomas      p.1
Purchase
26th Dec s PJ 5 1000
 

      I. Irish        p.2
2009
Purchase
28th Dec s PJ 5 45
 
      R. Reid        p.7
2009 2009
29th Purchase
Dec Bank CB 10 1425 15th Dec s PJ 5 1500
29th
Dec Dis CB 10 75  
1500   1500

N.B Creditors=56945

General Ledgers
 
      Premises     p.31
2009  
10000
1st Dec bal b/d Gl 42 0  
 

      Motor Van      p.32

2009  

pg. 20
1st Dec bal b/d Gl 41 1500  
 

Sales p.10
2009       2009      
31st Dec Total sales SJ 17 5050
for the
  month
31st 10505
Dec bal c/d 0 3rd Dec Cash CB 10 100000
10505
0   105050
1st Jan bal b/d 105050

      Loan      p.16
2009
9th Dec Bank CB 10 600
 
 
 

      Discount Allowed      p.62

2009  
30th
Dec Total discount CB 10 60  
for the month  
 

      Discount Received      p.61

2009
Total
29th Dec discount CB 10 75
for the
  month
 
 

      Purchases      p.3

pg. 21
2009  
31st
Dec Total credit PJ 5 52545  
for the month  
 

      Return Outwards      p.23

2009
31st Dec Total Returns
for the
  month ROJ 10 100
 

      Return Inwards      p.21

2009  
31st
Dec Total Returns  
for the month RIJ 12 200  
 

      Drawings      p.12
2009  
4th Dec Cash CB 10 1000  
 

      Rent and Rates      p.14

2009  
5th Dec Bank Cb 10 1000  
 

      Insurance      p.17
2009  
16th
Dec Bank CB 10 300  
 

           p.18

pg. 22
 Wages
2009  
17th
Dec Bank CB 10 5000  
 

      Motor Expenses      p.20

2009  
19th
Dec Cash CB 10 300  
 

      Capital      p.101
2009
1st Dec bal b/d GJ 1 202800
 

      Stock      P.55
10th 5000
Dec bal b/d GJ 1 0  
 
 

The Trial Balance

Jen's Supermarket
Trial Balance
as at 31st Dec 2009
Date Details Debit Credit
2009   $ $
31st Dec Capital   202800
  Cash 99700  
  Bank 43865  
  Premises 100000  
pg. 23
   Motor Van 1500  
  Sales   105050
  Loan   600
  Purchases 52545  
  Return Outwards   100
  Return Inwards 200  
  Drawings 1000  
  Rent and Rates 1000  
  Insurance 300  
  Wages 5000  
  Motor Expenses 300  
  Creditors   56945
  Debtors 10100  
  Stock 50000  
  Discount allowed 60  
  Discount received   75
      365570 365570

Adjustments

Closing Stock- $10245

Depreciation on Motor Van- 10%
Insurance owing- $50
Rent and Rates paid in advance- $50

The Trading and Profit and Loss

Jen's Supermarket
Trading and Profit and Loss
for the year ending 31st December 2009
      $ $ $
Sales     105050  
less Return Inwards     (200)  
Net Sales       104850
         
Add Opening Stock     50000  

pg. 24
 Purchases   52545    
less Return Outwards (100)    
Net Purchases     52445  
Cost of goods available for
sale   102445  
less closing stock     (10245)  
Cost of goods sold       (92200)
Gross Profit       12650
Add Discount Received     75
        12725
         
Less Expenses:        
Rent and Rates     500  
Insurance     350  
Wages     5000  
Motor Expenses     300  
Discount Allowed     60  
Depreciation for Motor
Van   150  
Total expenses       (6360)
Net profit       6365

The Balance Sheet

Jen's Supermarket
Balance Sheet
as at 31st Dec 2009
Fixed Assets   $ $ $
Premises     100000  
Motor Van   1500    
less depreciation   (150) 1350  
Total fixed assets       101350
         
Current Assets        
Closing Stock     10245  

pg. 25
 Debtors     10100  
Bank     43865  
Cash     99700  
Rent and Rates paid in
advance   500  
Total current assets     164410  
         
Less current liabilities      
Creditors   56945    
loan   600    
Insurance owing   50    
Total current liabilities (57595)  
Working capital       106815
        208165
Financed by        
Capital       202800
Add Net Profit       6365
        209165
Less Drawings       (1000)
Capital at end       208165

Performance evaluation and interpretation of results

In preparing the financial statements for the business “Jen’s Supermarket”, the Trading and
profit and Loss account showed a profit of ($6365) six thousand three hundred and sixty five
dollars during the month of December in the year 2009.

In the close of the financial year for Jen’s Supermarket there is an increase of capital, this
indicates that the business was profitable as shown in the following ratios.

pg. 26
The business was able to maximize its profitability on the Gross profit/ sales ratio percentage
and return on capital employed ratio percentage as indicated by the following:

1. Gross Profit to sales ratio.

Gross Profit = 12650 = 0.1

Sales 104850

Gross Profit as a percentage of sales

Gross Profit *100= 12650 *100= 12%

Sales 104850

Gross profit to Sales

11%
Gross Profit
Sales

89%

The sales for the period under review were 104850; the cost of goods sold was 92200.
Therefore the business made a gross profit of 12 650. Overall the business made ($12) twelve
dollars on every ($100) hundred dollars of sales.

pg. 27
2. Return on capital employed ratio

Net Profit = 6365 = 0.031

capital 205482.5
employed 0

Return on capital employed ratio percentage

Net Profit *100= 6365 *100= 3.1%

capital 205482.5
employed 0

Return on Capital Employed

3%

Net Profit
Capital Employed

97%

N.B Capital Employed= Opening Capital + Closing Capital/2

pg. 28
The capital at start was 202800, whilst at close it was 208 165. These figures show an increase
in the net worth of the business of 5365.

Comparison of figures at start and close

The comparison is being done between two liquidity ratios: the current ratio and acid test
ratio.

Current ratio

Current Assets = 164410

Current liabilities 57595

= 2.9:1

pg. 29
 Acid test ratio

Current assets- stock = 164410-10245

current liabilities 57595

= 154165
57595

= 2.7:1

1. The current ratio was 2.9:1 and the acid test ratio was 2.7:1.That is an indication that when
creditors are paid the remainder of cash is 1.9 and 1.7 respectively. Although stock was
deducted from the current assets the business was still able to repay its debts. This showed
that the current assets did not depend on closing stock to raise its figure.

2. The capital at beginning was 202800 while at end it was 208165 which showed an increase
by 5365 at the end of the month.

Suggestions/Recommendations

Current Ratio

It is recommended that Jen’s Supermarket

1. Uses the excess money to expand the business by opening another

supermarket.
2. Introduce new product to the business and purchase new equipment.

pg. 30
Gross Profit

It is suggested that Jen’s Supermarket should

1. Source cheaper suppliers to facilitate the demand of goods so profitability

would be greater at the end of the month.
2. Offer new promotions every week and offer the customers raffles at a
chance to win prizes at the end of the year.

These are given to help Jen’s Supermarket increase gross profit and sales.

Conclusion

It is clear that Jen’s Supermarket keeps adequate records for the business
to demonstrate the profitability over the financial period for the month. It could
however, increase the current ratio and gross profit by incorporating the
suggestions/recommendations outlined.

pg. 31
 Nevertheless Jen’s Supermarket made a good net profit for the month of
December in 2009.Overall based on the performance of the business Jen’s
Supermarket was able to make a profit of 6365 despite the low sales of 104 850.

pg. 32