HISTORY

After six months of being an employee, Mr. Timothy Davis F. Angara decided to
open up a business of his own. About four years ago, during his birthday, his grandmother
gave him a little capital to start with, but unfortunately, he had no idea as to the type of
business hell undertake. Mr. John Dexter Bautista, whos a good friend of Mr. Angara,
helped him come up with food business. With the capital of Mr. Angara and the
knowledge on food of Mr. Bautista, they decided to make their own product, the pocket
pie, and sold it near the third gate of St. Pauls University Dumaguete (St. Pauls branch).
Little by little, they enhanced their product and increased the price. They also created
other flavors to entice more customers. Years after, they decided to distribute some of
their products to Kiosks in Silliman University. Fortunately, their products became
profitable and so they decided to extend their operations in a mall.
In view of the fact that the business is getting bigger, they decided to obtain a loan
from a credit company to make things formal and legal. They acquired the necessary
permits and documentation and started their legit operations on September 2014 at
Robinsons Mall Dumaguete. Since its a ber month, their sales had rocketed up to two
to three times than expected. With the great amount of profit they have, they decided to
open up a main store at Dr. V. Locsin Street, Dumaguete City in February 2015. The store
served as the main office and as an avenue for exhibiting their products.
NAME AND TYPE OF ORGANIZATION
Massive Munchies Snackbar is a sole proprietorship owned by Mr. Timothy Davis
F. Angara engaged in producing and selling pocket pies and other snacks and beverages.
It was formerly named Meat Pies, then Dumaguete Pocket Pies then Monster Munchies
but when Mr. Angara registered the business to DTI, several restrictions as to the name of
the business were observed. Then and there, he came up with the name Massive
Munchies Snackbar which was permitted by the department.
Currently, the business is composed of fifteen employees; nine in the commissary
and six in their Robinsons and Locsin stalls. The nine employees in the commissary are

basically in charge with production while the other six employees are into selling the
products.
LOCATION MAP
Massive Munchies Snackbars main store is currently located at Dr. V Locsin
Street, Dumaguete City, Negros Oriental. The store is positioned beside Pasta King Caf
di Roma and opposite Quadros.

NATURE OF OPERATION
Massive Munchies Snackbar is a food business which provides both products and
services to its customers. It offers a variety of snack foods such as pocket pies, fries,
hotdogs and many more, at very affordable prices.
The operation of Massive Munchies is not complex considering that it is a smalltype business. Despite this, the business continued providing quality and guaranteed
affordable products to its customers. In fact, the business is known for its within-thebudget and delightful pocket pies, the business main product.
The Commissary, a production site located near its St. Paul University Dumaguete
Gate 3 branch, produces pocket pies every day. The number of pocket pies of various
flavors to be produced for the day depends on the discretion of the Commissary
2

Supervisor based on the forecasted demand. The different days of the week have different
market demand. Thus, the number of pocket pies to be produced is not fixed per day.
All pocket pies produced is stored overnight in the freezer which will then be
delivered the next day to its main store. Aside from its main store which is located at Dr.
V. Locsin St., it has two other stalls located at Robinsons Place and across St. Paul
University Dumaguete Gate 3. These two offers only the main product of the business,
the pocket pies in various flavors. Also, a fraction of the finished goods are delivered to
their distributors located at Prince Mart, Tanjay City and at KrossKat.
MARKET DESCRIPTION
Massive Munchies Snackbar is a food establishment that focuses on providing
unique food products and services to its customers. Since the increasing population of
Dumaguete City prefers to seek a value/price relationship that will not stretch their
budgets, Massive Munchies Snackbar is in the good position to offer their food products.
With their food products offered at a very low price, the customers can be flexible with
their tight budget.
Massive Munchies Snackbar has identified its target market to be those who seek
for unique pickings at a friendly price. It targets every single individual who seeks for
craving satisfaction. The location of the business various stalls clearly identifies its
primary target market which is the students. The students create the highest demand of
the products. Offering products at very affordable prices entices the students that look for
with-in the budget snack options. For instance, due to heavy extra-curricular activities
among students in schools, it is common for students to have snacks inside shopping
malls and food stands. The market positioning of the business stall is suitable and
accessible by them. The secondary market would be the working class who seeks for
good snacks during break time. These target markets are more flexible in budgets and
seek more than a value/price relationship.
COMPETITIVE POSITION
The business has been in the food industry for almost four years; from its humble
beginnings as being sold in Silliman Kiosks up until it has opened its branches. Known
3

for its unique and good-tasting snack products, Massive Munchies Snackbar has become
one of the best-selling snackbars in town. Compared to other snack establishments and
fast-food chains, Massive Munchies Snackbar offers unique, mouth-watering snacks at
very affordable prices which set them apart from their competitors.
Unique food products
The business target market is diversified. It targets students, workers and every
individual who look for craving satisfaction at cheap prices. Massive Munchies Snackbar
offers wide variety of snacks to choose from. Aside from their best-selling flavored
pocket and dessert pies they also offer fries and classy burgers to their customers.
Low prices
Not only does Massive Munchies bring satisfaction to customers through their
delectable snacks but of the low prices these are offered as well. The prices of their
products are very student friendly and fit within the budget.
MARKETING APPROACH
According to the interview conducted with the owner, the Massive Munchies
Snackbar has light marketing efforts. Since they do not have high margins yet, the owner
believes that there is still no room for lavish marketing. Moreover, the owner believes
that the Massive Munchies Snackbar has already gained popularity throughout
Dumaguete. Since the inception of the business, they already have engaged into
advertising their products in social networking sites like the facebook page and through
radio advertisements. At present times they only rely on the word of mouth
recommendations from their customers since there already is an established name of their
main product.

ORGANIZATIONAL CHART

Manager/Owner
Mr. Timothy Davis F. Angara

Food Manager

Bookkeeper
Mrs. Gloria

Commissary
Supervisor

Cooks
Locsin Branch

CashiersLocsin Branch

Cook/CashierSt. Pauls

Cook/CashierRobinsons

Commissary Cooks/
Purchasers (8)

ROLES AND RESPONSIBILITIES

Owner/Manager
o manages the business as a whole
o oversees the production process of pocket pies
o authorizes the commissary supervisor and cashier to use cash received and cash in
the cash register for payment of bills and purchase of inventory
o reviews the store and commissary blue book daily
o monitors the financial stability of the business

Food Manager
o Responsible for research and development of its products especially the pocket
pies

Bookkeeper
o prepares daily, weekly, monthly and yearly reports
o prepares SSS, PhilHealth and PAG-IBIG of employees
o submits reports to BIR

Commissary Supervisor
o monitors the timely performance of the designated tasks in the commissary
o counts the beginning and ending inventory stock every day and subsequently
o
o
o
o

records it in the commissary blue book

counts the stocks delivered
purchases the needed fresh ingredients for the pocket pies everyday
estimates the number of pies to be produced everyday
guides the commissary cooks in their assigned tasks and helps them in the

production process
o closes the main store every day, receives the per day sales and the store blue book
and will eventually give it to the owner/manager
o assigns a person from the commissary to get the sales per day and the store blue
book from the main store, Robinsons branch and St. Pauls branch
o records the number of pocket pies per flavor produced per day
o pays bills such as electric bill, water bill, wifi etc.

Cashier (Main Store)

o receives payment from the customers upon order
6

o
o
o
o
o
o

prepares customer orders

records sales or cash receipts in the store blue book
records cash disbursements in the store blue book
regularly monitors store inventory
orders new stocks from suppliers when reorder level is reached
lists any stock or inventory items needed and eventually gives it to the purchasing

o
o
o
o

team
counts the stocks delivered and records it in the store blue book
opens the store sometimes
cleans and prepares the store before opening for business proper
deep-fries the pocket pies

Cashier (Robinsons)
o receives cash payments from customers
o records any cash sales or receipts in the store blue book
o records any cash disbursements in the store blue book
o deep-fries the pocket pies

Cashier (St. Pauls Branch)

o receives cash payments from customers
o records any cash sales or receipts in the store blue book
o records any cash disbursements in the store blue book
o deep-fries the pocket pies

Commissary Cooks (Purchasing team)

o assigned in the production process of pocket pies
o delivers pocket pies to the main store, Robinsons branch, St. Pauls branch and
KrossKat distributor
o get the list of orders needed in the main store every day, purchase the stocks and
deliver it to the store
o sometimes, assigned by the commissary supervisor to get the sales per day and the
store blue book from the main store, Robinsons branch and St. Pauls

Cook (Main Store)

o cooks customer orders
o cleans the customer table sometimes
7

o
o
o
o
o
o
o

receives and prepares customer orders

records any cash sales or receipts in the Blue book sometimes
records any cash disbursements in the Blue book sometimes
regularly monitors the inventory stock in the store
receives payment from the customers and subsequently put it in the cash register
opens the store sometimes
cleans and prepares the store before opening to customers

PHYSICAL LAYOUT
*Top view of the main store at Dr. V. Locsin St., Dumaguete City

STATUS OF INTERNAL CONTROL

The most fundamental control for an organization is the physical protection of its
facilities and assets. In the case of Massive Munchies, substantial resources have been
invested in order to ensure that physical controls are present an effective.

Commissary
Physical Layout
There are designated areas for each production process. There is also one
designated entrance and exit door. A security lock is provided to secure that no
unauthorized personnel can enter the commissary during nonworking hours.
Although the production site does not have any CCTV camera, but still the
location is closely monitored for any unauthorized personnel considering that it
is within a secured premise.
Quality Control
There is a proper working attire guideline but it is not strictly
implemented. Given that personnel are provided by the management with hair
net, mask and apron, but still, there are instances that such guideline is not
properly observed by the commissary personnel.
Ensuring clean working environment and produced product is a great
factor to consider for achieving success. There are sanitary precautions to be
observed before, during and after the production process (i.e. hand washing).
These are appropriately observed in the production site. Screens are also
provided all over the commissary to ensure that no flies, mosquitoes and other
insects can enter the production area.
Before the finished pocket and dessert pies are stored in the freezers as
well as prepared for delivery, the supervisor checks every tray to assure that
damaged pies are not included. Thus, there is constant monitoring of pocket pie
quality through product inspection during and after the production process.
Inventory Control

10

There is a proper designation of every flavour of produced pocket pies.

Finished goods are monitored through constant counting and recording before
storing in the freezer and before delivery the next day. Raw materials inventory
are placed in a designated stock area within the production site. Without any
access restriction, these inventories are easily accessed by any commissary
personnel. But still, the commissary supervisor is monitoring the inventory count
every morning and every after work.
Presence of monitoring board, which everyone can see any task not yet
fulfilled and the number of inventories they currently have in the production
area, is one control that is observed by the department. Further, the commissary
supervisor updates such every now and then for any additions or deductions.

Store
Cash Register
Only the cashiers handle the key of the cash register but it can also be
accessed by the cooks. The assigned cashier holds the key and after shift, gives it
to the next cashier.
Cash
Revolving fund of P3000 is maintained in the cash box. Any petty
expenditure is taken from this amount and can be accessed by any store
employee. Cash counts are always conducted at the end of the day by the cashier.

Authorized Area-Behind the Counter

Only the cashier and cook are allowed to enter the restricted area. Both of
them can leave the area whenever there are orders to be served for the dine-in
customers. But there has been no case wherein such area was left unmanned.

Robinsons
Security

11

The stall is within the premises of the Robinsons Place Dumaguete, with
CCTV cameras and security guard.
Cash and Cash Register
Only one employee is assigned in the stall, unless during peak seasons.
Thus, he/she is has the only access to any cash amounts. Any amount taken from
the cash register for petty expenditure is recorded in the Blue Book. Cash counts
are always conducted at the end of the day by the cashier.

Existing Accounting System

Revenue Cycle
12

CASH RECEIPTS FLOWCHART (Main Store and Branches)

CASHIER/COOK
COMMISSARY SUPERVISOR
Start

Receives
Customer Order

Submits Cash
and the Blue Book

Records Customer
Order
Blue Book

Receives Cash and

Blue Book
Reconciles Cash
with Book Records

Receives
Payment from

Receives Cash and

Blue Book

Issues Receipt
Receipts/
Sales Invoice

Submits total cash

receipts
Together with the
Blue Book

CASH RECEIPTS (Main Store and Other Branches)

PERSONNEL INVOLVED

FUNCTIONS IN THE CYCLE

13

Cook/Cashier

Commissary Supervisor

Owner/Manager

Takes orders from customers and records

the orders in the Blue Book

Receives payment from the customer and

places the money in the cash register

Issues receipts

Obtains the blue book and cash at the end

of the day
Reconciles the book with the cash
Hand-overs the book and cash to the

manager
Receives

commissary supervisor
Asks for updates and reports regarding the

the

book

and

cash

from

business and employees

14

CASH RECEIPTS FLOWCHART (Distributor)

COMMISSARY PERSONNEL

COMMISSARY SUPERVISOR

OWNER/MANAGER

15

Start

Delivery of
inventory
Submits Cash

Receives payment
from prior delivery
of inventory

Receives Cash
Receives Cash

Submits cash
received

Blue Book

CASH RECEIPTS (Distributor)

PERSONNEL INVOLVED

FUNCTIONS IN THE CYCLE

16

Commissary Personnel

Commissary Supervisor

Owner/Manager

Delivers the finished goods to different

distributors
Receives cash as payment from inventory sold

from previous delivery

Submits cash to the Commissary Supervisor
Obtains cash at the end of the day and

Records it in its Blue Book

Hand-overs cash and Blue Book to the

manager
Receives cash from commissary supervisor
Asks for updates and reports regarding the
business and employees

17

Existing Accounting System

Conversion Cycle

18

CONVERSION CYCLE
Commissary Personnel

Commissary Supervisor

19

Start

Transfer of ingredients
from storage to
production area

Preparation of
ingredients

Delivery to the
store, stalls and
distributor the
next day

Blue Book

Crust making

Cooking the filling

Forming the flavored

pocket and dessert
pies
Assigning colors to
the finished products

Storing in the freezer

Inspection and physical

count of the finished
products
20

CONVERSION CYCLE
PERSONNEL INVOVLED

FUNCTION/S IN THE CYCLE

21

Transfer the raw materials from the storage

to the working area to start the production of

pocket and dessert pies.

Raw material ingredients are prepared and
assigned to each different process in the

production area.
Pocket pie fillings are cooked.
Crust making involves three steps. First is
the

dough

making.

One

commissary

personnel is assigned to make the dough.

The finished dough is then transferred to the
Commissary Personnel

next step wherein it is flattened using the

rolling machine. Lastly, the flattened dough
is cut into small circles ready for pie

formation.
The cooked fillings are then placed inside
the flattened-circle dough and then formed

into pocket pies.

The finished pocket pies are assigned with
designated colors to segregate one flavor

from the other.

Delivery of pocket pies to the store, stall and
its distributor.

22

The finished products are then counted and

inspected by the Commissary Supervisor for

Commissary Supervisor

any defects.
Finished products are placed inside the
freezer ready for delivery on the next day.

Existing Accounting System

Disbursement Cycle

23

PURCHASE OF RETAILED GOODS (Main Store)

Cashier or Cook
Cashier

24

Start

Performs physical
count of inventories

Pays for the

goods upon
delivery

Blue Book

Communicates to the
supplier

Delivery
Receipt/ Official

Receipt

Performs physical count

of inventories

25

Blue Book

PURCHASE OF RETAILED GOODS (Main Store)

PERSONNEL INVOLVED
FUNCTIONS IN THE CYCLE
Determines the buffers stock or

reorder level
Do the inventory count in the store and
subsequently records the result in the

Cashier or Cook

Blue Book
Communicates

to

the

supplier

regarding the need to purchase goods

to be restocked when the stock level

reaches the reorder level

Counts the delivered

goods

and

subsequently records it in the Blue

Cashier

Book
Pays for goods upon delivery
Receives the delivery receipt

or

official receipt

26

PURCHASE OF RAW MATERIALS (Commissary)

Commissary Supervisor
Commissary Personnel

27

Start

Performs physical count

of inventories

Blue Book

Communicates to the
supplier

Purchase other
Raw Materials
needed in the
production

Payment upon
delivery of the
goods

Purchase
Receipt

Delivery
Receipt/
OR

Performs physical count

of inventories
28
Blue Book

PURCHASE OF RAW MATERIALS (Commissary)

PERSONNEL INVOLVED
FUNCTIONS IN THE CYCLE
Determines the buffers stock or reorder

level
Do the beginning and ending inventory
count in the commissary and subsequently

Commissary Supervisor

records the result in the Blue Book

Communicates to the supplier regarding the
need to purchase goods to be restocked
when the stock level reaches the reorder

Commissary Personnel

Commissary Supervisor

level
**for purchases**
Purchase other needed Raw Materials for

the production
Payment of Goods
Physical count of

newly

purchased

inventories
UTILITIES AND RENT EXPENSE
Cashier or Cook/ Commissary
Cook

Owner/Manager

Commissary Supervisor

29

Receives the
monthly bills

Monthly Bills

Gets the bill and

forwards it to the
Supervisor

Monthly Bills

Contract
Agreement with
Robinsons

Pays the Bills

Monthly
Bills

Official
Receipt
Contract
Agreement with
Robinsons

A
Monthly Bills

Pays the
store rental

LEGEND:
Store and Rob UtilitiesExpense
Commissary Utilities Expense

Bank (Robinsons)

Official
Receipt

Deposit Slip
Issues a check for
Prepaid Rent
(Robinsons)

Check

Store and Rob Rent Expense

PAYMENT OF UTILITIES
PERSONNEL INVOLVED
Cashier or Cook (Store)/ Commissary

FUNCTION/S IN THE CYCLE

Endorses the bill to the manager/owner

30

personnel
Manager/Owner
Cashier or Cook

SALARIES AND WAGES (Direct Employees and Commissary)

Forwards the bill to the Commissary
Owner/Manager Commissary Supervisor Commissary Personnel
Supervisor for payment
Pays the bills (through
bank Robinsons Requests for
Endorses thea CA

Start

branch)
Commissary Supervisor

Receives
Monthly
Billings from
Agency

Requests for
Cash advance
(Cashier or
Cook CA)

Gets the money in the

cash register and
records it
PAYMENT
subsequently
Monthly
Billings

Approves
the
Indorses
cash advance

Cash advance

the deposit slip to Robinsons Place

Prepares the
Salary
Withholdings for
all employees

Dumaguete as proof of payment

Records the payment in the Blue Book

OF RENT(Main Store and Robinsons

Branch)
Gives the cash

Blue Book

Weekly Salary Withholding Cash

Advance = Net Salary

Supervisor
GetsCommissary
the payment of bill
and Net Salary in the
cash register

Salary
Withholdings for
all employees

advance and records

it subsequently

Manager/Owner

Blue Book

request by the
commissary
personnel
**for
Robinsons**

Pays the rental expense of the Main Store

Indorses the bill and gives authority to the
Blue Book

Commissary Supervisor to issue the Acheck

Bookkeeper

Monthly Salary
for rental at Robinsons
Place
Withholding
Cash
Advance
= Net Salary
Issues a check to
Robinsons

Records the payment in the Blue Book

Payment of net monthly
salary (Commissary
department)

Legend:
Store Process
Commissary Process

Blue Book

SALARIES AND WAGES

31

PERSONNEL INVOLVED

FUNCTION/S IN THE CYCLE

Requests for their own cash advance to the owner
Gets the approved cash advance in the cash

register
Records any cash advances in the Blue Book
Based on weekly salary, gets his/her net salary
( weekly salary cash advance) in the cash

Cashier or Cook

register and records in the Blue Book

**Agency Collection**
Receives the bill from the agency

and

subsequently pays the collector (cash comes from

Owner/Manager

the cash register)

Records the cash disbursement in the Blue Book
Approves any request of cash advances
Requests for any cash advance by the

Commissary Personnel
Once approved, pays out cash to the one who
requested the cash advance and subsequently

Commissary Supervisor

records in the blue book

On monthly basis, pays the net salary (Monthly
Salary- Cash advance) to the commissary

Bookkeeper

personnel
Records salary payment in the blue book
Prepares Salary Withholdings for all employees

32

ASSESSMENT OF ROLES AND RESPONSIBILITIES

Owner/Manager
Roles /
Responsibilities
Manages
the

Strength(s)

business as a whole

Weakness(es)

Business

processes

can

monitored

be

regularly
Proprietor can make

Possibility

that

proprietor

the
may

override the controls

of the business

quick decisions when

problems or concerns
Oversees

the

arise
Proprietor can signal

production process

the food manager for

of pocket pies

any
changes/improvement
s in the production
process
Ensures

that

authorizes

transactions

are

transactions

properly

especially those that

and approved.

Approves

are material
Monitors

and

the

financial stability of

authorized

The

business

financial status can be

the business

assessed
Provides information
to be used in making

Reviews the store

and

commissary

blue book daily

financial decisions
Ensures that daily
transactions

are

recorded

and

reflected in the blue

33

book
Proprietor can check
the details of daily
transactions and act
on

questionable

transactions daily
Avoids
potential
fraud or manipulation
of details

Ensures that there are

no

embezzlements

and

manipulations

done
Interviews and hires

their employees.

by

the

employees.
Ensures
that

the

persons

being

employed
business

in

the

are

well-

known

and

scrutinized

by

the

owner.
Food Manager
Roles /
Responsibilities
Responsible
for
research

and

Strength(s)

Weakness(es)

Ensures that products

The preference, as to

are well researched

the

development of its

and

before

products, of the food

products especially

introducing

to

manager may differ

the pocket pies

customers.

tested

taste

of

the

from the preference

of the customers
The variety of flavors
34

or products may be
limited only to the
ideas of the food

manager
In case

the

manager

exits

business,

food
the
the

successor may have a

difficult

time

achieving the taste of

the

products

developed

by

the

former.
Commissary Supervisor
Roles /
Responsibilities
Monitors
the

Strength(s)

Weakness(es)

Daily monitoring of

Employees

when

performance of the

employees improves

monitored tend to be

designated tasks in

their

conscious

the commissary

and efficiency
Corrective
actions

performance and act

can be imposed in

supervisor.
Theres a deviation

case

effectiveness

there

problems

their

well to impress their

the

between the actual

performance of the

performance of the

employees
All actions of the

employees

employees

and

monitored.

in

are

of

are

when

nobody is watching
that

of

their

projected
actions/performance
when somebody is
35

Counts

the

Prevents the business

watching.
Potential avenue for

remaining inventory

from running out of

fraud; the supervisor

stock every day and

stock
Ensures

can

subsequently records

that

declare

record

and
fewer

it in the commissary

remaining stocks for

inventories and use

blue book

the day are recorded

the

in the blue book and

personal

reported

to

the

manager

others

consumption.
The likelihood

for

of

stealing the goods is

Purchases
needed

the

fresh

Ensures

that

materials

used

the
in

ingredients for the

making the products

pocket

are fresh thus the

pies

every

day

quality

of

products

very high.
Needed ingredients
may not be available
in the marketplace.

the
are

maintained/enhanced.
Ensures
the
production of pocket

Estimates

the

pies daily
Reduces the tendency

Estimates

are

not

they

are

number of pies to be

of storing goods that

reliable;

produced everyday

are

produced

mainly based on the

days/weeks ago. It

personal judgment or

ensures that the pies

discretion

are sold on that same

supervisor.

day

they

produced;

with

of

the

are
an

allowance of a day or
two.
36

Avoids producing too

few nor

Guides

the

commissary cooks in

the

pies
Additional input in
the

their assigned tasks

and helps them in

too many

production

process
Any queries of the
employees

production

in

production

process

the

process

are

addressed

immediately by the
Closes
store

the

main

every

day,

supervisor.
Personal delivery of

The

stealing is very high.

The supervisor could

the blue book to the

likelihood

of

receives the per day

manager avoids any

sales and the store

further alteration of

discreetly enter the

blue

details.
Only one person is

office anytime after

accountable in case

With this, he could

there

get

book

and

eventually gives it to

the owner/manager

is

fraud

suspected
or

unjust

manipulation

of

details.
Ensures that the blue
book

the business hours.

is

handed

supplies

for

personal

consumption.
The supervisor may
not be able to handle

personally

all the duties assigned

to

to him.

the

manager.
Assigns

person

Creates

working

Theres a possibility

from the commissary

environment

that

of manipulating the

to get the sales per

observes

trust

and

day and the store

confidence

in

the

data
The assigned person

may not be able to

37

blue book from the

main

employees.

perform

store,

Robinsons

branch

duties

assigned to him.
Theres a tendency
that

and St. Pauls branch

the

the

assigned

person will use the

data in the blue book
for
Records the number
of

pocket

pies

produced per day

Pays monthly bills

Ensures that the pies

his

personal

intention.
The supervisor may

produced

are

be overburdened by

recorded

and

the

additional

accounted for.

responsibility

Delivery of monthly

assigned to him.
The likelihood

such as electric bill,

payment

is

water bill, WiFi etc.

efficient

since

additional

more

costs

of

stealing the cash for

no

payment is still high.

or

charges are involved.

Commissary Cook (Purchasing Team)

Roles /
Responsibilities
Assigned in the

Strength(s)

Quality

Weakness(es)
control

production process

because they know

of pocket pies

/they have knowledge

Delivers pocket pies

of what theyre doing.

They
have
the

to the main store,

knowledge as to the

The workforce in the

production may be
38

Robinsons branch,

number

St. Pauls branch

pies to be delivered

and

per

KrossKat

distributor

of

pocket

stall.

reduced.

Any

questions as to the
quantity

by

the

people in charge in
the

stalls

can

be

addressed
Gets

the

list

of

immediately.
Saves time because

orders needed in the

all

main

items

store

every

day, purchase the

stocks and deliver it

necessary

are

Imposes

twofold

responsibility to the

already

employees.

listed.
Ensures that the items
needed are purchased

to the store
Assigned

the

by

the

and delivered.
Creates a working

Theres a possibility

commissary

environment

that

of manipulating the

supervisor to get the

observes

trust

and

sales per day and

confidence

in

the

data
The employee may

the store blue book

employees.
The
employees

not be able to perform

Robinsons branch

morale

and

thus improving the

him.
Theres a tendency

from the main store,

St.

Pauls

sometimes

is

performance.

the duties assigned to

boosted

effectiveness
efficiency

of

and

that

the

employee

his

will use the data in

the blue book for his
personal intention.

Cooks (Main Store and Stalls)

Roles /

Strength(s)

Weakness(es)
39

Responsibilities
Cooks
customer

Matching

orders ( deep-fries

concept/principle: as

the pocket pies)

to

the

duties

and

Receives

and

skills.
Ensures

that

the

prepares

customer

orders

of

the

orders

customers

are

cooked/
prepared
Cleans and prepares
the

store

opening

after order.
The cleanliness of the

before
it

immediately

office is maintained

to

thus

customers

providing

workplace

that

a
is

work-conducive.

Opens

the

store

sometimes

Ensures

that

business

the

Potential avenue for

operates

fraud; the employee

upon

might open the store

immediately
opening.

earlier and use the

supplies for personal

Regularly monitors

the inventory stock

Ensures that the stalls

dont

in the store

run-out

stocks.
Signals

of

consumption.
Since there is only
one

cook

in

the

Robinsons and St.

the

Pauls stalls, the cook

purchasing team of

may not be able to

the

address

necessary

ingredients

that

already reached their

to

customers

the
orders

immediately.

buffer levels.
40

Ensures

that

the

stocks are not yet

Receives

payment

spoiled.
Ensures

that

the

No

segregation

of

from the customers

products cooked and

duties. Handling and

and

subsequently

sold to customers and

recording

put it in the cash

properly billed and

receipts

should

be

register

recorded.

handled

by

the

of

cash

cashier.
Access to the cash
registry

should

be

limited only to the

cashier
Records

cash

Ensures

that

any

and

owner.
No segregation

the
of

receipts and cash

receipts

and

duties. Handling and

disbursements in the

disbursements

are

recording

Blue Book

recorded in the blue

receipts

book.

disbursements should

of

cash

and

cash

be handled by the
cashier.
Cashier
Roles /

Strength(s)

Responsibilities
Receives

cash

payments

from

sales or receipts in
the store blue book

concept/

principle: as to the
duties and skills.

customers
Records any cash

Matching

Weakness(es)

Ensures

that

cash

sales/receipts

are

properly recorded.

41

Records any cash

disbursements in the

that

cash

disbursements

are

properly recorded.

store blue book

Regularly monitors

Ensures

store inventory

Signals

the

one cashier/cook in

the

necessary

the Robinsons and

that

St. Pauls stalls, the

already reached their

cashier may not be

buffer levels.
Ensures
that

able to address to the

the

customers

stocks are not yet

Orders new stocks

reorder

level

inventory

items

needed

and

eventually give it to

Saves

orders

of

time

in

Imposes

twofold

purchasing the stocks

responsibility to the

because

employees.

all

the

already listed.
Ensures that the items
needed

customer

run-out

necessary items are

the purchasing team

Prepares

immediately.

stocks.

is

reached
Lists any stock or

orders

spoiled.
Ensures that the stalls
dont

from suppliers when

Since there is only

purchasing team of
ingredients

(deep-fries

the pocket pies)

will

be

purchased.
Ensures that customer

No

segregation

of

orders are prepared

duties: preparing and

and customers needs

cooking

are

orders should be the

addressed

immediately.

customers

responsibility of the
cook.

Cleans and prepares

the

store

The cleanliness of the

before
42

opening

for

office is maintained

business proper

thus

providing

workplace
Opens

the

store

sometimes

that

a
is

work-conducive.
Ensures
that
the
business

Potential avenue for

operates

fraud; the employee

upon

might open the store

immediately
opening.

earlier and use the

supplies for personal

Counts the stocks

delivered

and

records it in the

store blue book

Ensures that what the

consumption.
Takes
time.

The

supplies ordered were

employee may not be

delivered.
Ensures
that

able to address to the

the

needs

items/supplies
received

of

the

customers.
were

recorded.
Bookkeeper
Roles /
Responsibilities
Prepares
daily,
weekly,

monthly

Strength(s)

and yearly reports.

Transparency
Transactions

Weakness(es)

Theres a possibility

are

of manipulating the

reflected and reported

data especially those

regularly.

that

are

sent/reported

to

be
to

external parties like

BIR.

Submits reports to
BIR

The business fulfills

its legal responsibility

43

ASSESSMENT OF THE CYCLES

REVENUE CYCLE

Particular
Procedure
Cashier/cook takes
orders

Strength(s)

from

customers

issues

receipts

customers,

the

when

records the orders in

the Blue Book
The
cashier/cook

They can keep track

of

and

Weakness(es)

inventory

customer

There is no proper

segregation of duties
Employees
can
manipulate the data

orders

in the book

The official receipt

to

issued becomes valid

issued, manipulation

if

evidence

of sales and cash

requested

for

the

sales

The

cashier/cook

will

receive

payment

If receipts are not

from

customer and place

received is probable

They can safeguard

Any personnel can

the money received

hold the key of the

directly

cash register
Embezzlement

from

the

customer

money in the cash

cash

register
At the end of the

possibility

Avoids risk of

day, the commissary

data

supervisor

manipulation

acquire/obtain
money

and

will
the

also

and

blue

embezzlement

book
The

is

of

of cash
commissary

supervisor

will

They can ascertain

the

accuracy

of

reconcile the money

reporting of the daily

with the book and

sales

hands it over to the

44

manager/owner
Asks for updates and

The manager/owner

Some

information

reports regarding the

is aware if theres

and updates might

business

problems

not be reported.

and

employees

in

the

business
The manager/owner

will know whether

employees

borrow

money

request

or

salary advances
CONVERSION CYCLE

There

Strength(s)
is multitasking

production

area

in

since

the

Weakness(es)
Confusing workload

since

all

there is no segregation of

commissary personnel know every

duties.
May create conflicts with one

process.
No delay of production since all the

commissary

personnel

to

commissary personnel can work the

another since there is no

work of others if ever there are

division of labor.

absences.
DISBURSEMENT CYCLE
Subsystem of
Disbursement Cycle
Purchase of retailed

Strength(s)

Weakness(es)

Proper monitoring

There

are

goods and raw materials

of goods available

overlapping

inventory

for sale and raw

responsibilities
Likelihood
that

materials

for

of

production
Identify any out-

recording

of-stock

be manipulated

inventories

transactions

of
can

and
45

those inventories
that

reaches

reorder level
Control of stock

available
Every

cash

purchase

is

recorded in the

Blue Book
Every personnel
involved in the
process

is

knowledgeable
not only of his/her
Payment

of

utilities,

rent and other expenses

designated work
On time payment

are

overlapping

impose

responsibilities
Likelihood
that

any

or penalty
Expenses

of

recording
are

transactions

accounted for
Salaries and Wages

There

of bills does not

additional charges

of
can

be manipulated
Likelihood
that
recording
transactions

of
can

be manipulated

46

OBJECTIVES
This accounting systems manual aims:
1. To ensure that transactions are properly documented and recorded.
2. To improve the accounting for and safekeeping of assets.
3. To improve the organizational chart for command chain responsibility.
4. To improve/strengthen internal controls already in place and establish new
controls
5. To provide a chart of accounts for appropriate bookkeeping.
6. To propose the implementation of segregation of duties for incompatible
functions.
7. To provide a clearer flow of information from processing of the transactions up to
the reporting of financial information.
8. To assist the business in recording and reporting transactions if they engage in
Franchising.
ADVANTAGES AND DISADVANTAGES
Upon implementation of the proposed accounting systems manual, the following
are the advantages and disadvantages:
Advantages:
1. It will eliminate, if not, minimize the probability of misstatements, either error or
fraud, and embezzlement of assets due to overlapping of responsibilities.
2. Proper segregation of duties would limit access to important files and data.
3. There would be accurate documentation and evidence regarding their revenues
and expenditures. Separate books for revenues and expenditures would not
complicate the recording of transactions.
4. Specification of tasks would lead to employees gaining expertise from their
designated duties. Accordingly, the company can also assess the performance of
employees.
5. Proper flow of processes and division of labor would increase their productivity.
47

6. Approval of purchases and other expenditures would ensure that cash disbursed
are authorized.
7. There would be proper recording of transactions and the business can easily
measure their profitability.
8. The business would become more effective and efficient in its overall operations.
Disadvantages:
1. The business needs to hire more people in order to segregate their duties and
improve their internal control, thus would incur additional costs for the business.
2. Additional costs would be needed to fully impose the proposed accounting
systems manual, which includes securing requisition slips and other necessary
documentation.
3. The implementation of which can be tedious and troublesome since employees
need to ask for approval from owners for purchases and any release in cash.
GENERAL RECOMMENDATIONS
The group highly recommends for the adoption of an accounting process that
properly accounts the necessary transactions of Massive Munchies Snackbar. The
accounting process that will be considered should have the attributes that will meet the
requirements of the business such as simplicity and utility. With an accounting process
come the preparation financial statements for transparency and accountability purposes.
This will enhance the business ability to determine its standing in its industry. Moreover,
providing proper documentation of all transactions is also recommended through which
the stakeholders will be able to continually track the ins and outs of assets in the business.
Lastly, separate the recording in its books for all cash receipts, cash disbursements and
inventory for every store/stall, commissary and purchasing departments and for its
distributors.
Should the owner opt to open the business for franchising, the following will
become part of the major changes for the manual:

Accounting for franchising shall be used to meet the requirements of such

engagement. The chart of accounts will be revised as well, depending on
the requirement of franchise accounting.
48

Policies and necessary undertakings with regard to the franchise

agreement shall be implemented and observed.

REVENUE CYCLE
The group recommends that the business needs to have proper segregation of
duties to improve their internal controls. The business existing revenue cycle is at risk of
misstatements or fraudulent activities due to the overlapping of duties of employees.
Even though the business has exercise trust and integrity, the owner cannot guarantee that
employees act in good faith when pressure and opportunity arises. The group also
recommends that the business should issue Official Receipts to every customer in order to
track the daily sales and to provide basis for recording transactions.
Upon the remittance of the cashier to the Commissary Supervisor, Daily Cash
Remittance Report (See Appendix) is also attached which will serves as a cash transfer
proof.
CONVERSION CYCLE
It is recommended that every personnel in the commissary should be delegated
with a task that is distinct and separate from other task of other commissary personnel.
This will enhance the specialization of work in the production area thus, increasing
productivity. The Manager should set rules and regulations inside the commissary that
must be followed by all of the commissary personnel. These rules and regulations should
be appropriately implemented by the Commissary Supervisor and must be communicated
clearly to the commissary personnel.
Upon delivery of the pocket pies to the store and stalls, a Delivery Form (See
Appendix) is signed by the personnel receiving the pocket pies. For its distributors,
Delivery Form is required to be signed by the ones in-charged and upon payment,
Official Receipt is issued. A different recording in the Commissary Blue Book for
deliveries is also needed. At the end of the day, preparation of Daily Delivery Report (See
Appendix) is required for the department in-charged for delivery.
DISBURSEMENT CYCLE
The group recommends for the business to provide a separate book for each
store/stall, for the commissary and purchasing department that will be used to record all
49

the transactions involving the disbursement of cash. In purchasing inventories and raw
materials, there should always be a Purchase Requisition Form (See Appendix) that has to
be approved by the Manager. Same goes with the payment of utilities and rents. The
person in charge to pay for it should obtain the approval of the Manager before disbursing
cash. Such document is always furnished which will serve as a proof of the cash outlay
made by the person in charge.
POLICIES AND PROCEDURES
Upon order of customers:
The cook will take the order of the customers and records such order in the Blue
Book (Inventory) to determine the amount of inventory sold.
The cook will be in charge of preparing and giving the customers orders, which
includes cooking, wrapping and delivery, if applicable.
The cashier should be responsible in billing the customer.
Upon payment of customer:
Upon receiving the payment, issuing of Official Receipts and separate recording in
the Blue Book (Cash Receipts) are necessary.
The cashier must double count the cash received and change given to certify its exact
amount.
It is necessary that any amount received by the cashier is always placed in the cash
register safekeeping.

At the end of the day:

The cashier must submit the money and the Cash Receipts, Cash Disbursements and
Inventory Blue Book to the Commissary Supervisor.
The Commissary Supervisor reconciles the daily sales and expenditures with the net
amount collected. He must also ascertain whether the beginning inventory and
ending inventory are in agreement with the recorded sales.
The Commissary Supervisor submits the reconciled documents with the net amount
received from the cashier to the owner/manager.
The manager/owner records the transactions in the Spreadsheet (Google Docs).
50

Purchase of Retailed Goods and Raw Materials

Retailed goods and raw materials acquisitions should be accompanied with a
purchase requisition form and should be approved by the Manager.
Receiving report is necessary upon receiving the delivered inventories from the
supplier. Also, physical counted is required before including it together with the
stored inventory and such inventories are properly accounted for.
Secure official receipt and not delivery receipt upon payment of the delivered
inventories.
Payment of Utilities
A Request for Payment is made and should be approved by the Manager.
Proper source documents should be furnished in the payment of utilities. Documents
regarding disbursements records must be available to the Manager/Owners.
Person-in-charge of the payment should have proper authority to do such.
Payment of Rentals
Preparation of the check shall be made by the Manager.
Actual payment and recording of payment for rentals shall be assigned to the
Commissary Supervisor.
Check shall be verified by the signatory before signing it.
Supporting documents such as the receipts and vouchers shall be kept as proofs of
the occurrence of the transactions.
Payroll
Payroll payments shall be based on the DTR.
Each employee should have one daily time record restricted for his/her usage and
should be located in an area accessible and secured.
Only the Owner for direct employees and the Commissary Supervisor, authorized by
the owner, for Commissary Personnel have the authority for payroll disbursements.
A cash advance form must be filled up and shall be approved by the owner. Only the
owner can disburse any cash advances for direct employees. The Commissary
Supervisor shall endorse any cash advances by the Commissary personnel to the

51

owner. Given the authority, only the Commissary Supervisor can disburse cash as
approved by the owner.
For payment of bills from the agency, only the owner shall pay the billing amount
and official receipt is necessary.
Check Disbursement Policy
All checks especially those that are issued for significant and unusual payments must
be signed by the owner.
Check shall be verified by the signatory before signing it.
There should be an attached official receipt with every check disbursement.
The owner must ensure the correctness and validity of all material and significant
payments entered into by the company.
Purchase of Fixed Assets
The Manager shall prepare a purchase order for the purchase of new asset to be
authorized and signed by the co-owner.
All payments for the purchase of fixed assets shall be made through direct payment
of cash or checks payable to the supplier.

Asset Management
Both the Manager and Commissary Supervisor shall be responsible for the fixed
asset management. The Commissary Supervisor should track the location, quantity,
condition, maintenance of the fixed assets.
The Manager should be responsible to estimate depreciation status of the fixed
assets.
Disposal of Assets
The fixed assets of the business should be assessed for any obsolescence.
The owner shall authorize the disposal of assets.
The bookkeeper shall properly record the disposal of assets.

RULES AND REGULATIONS

52

Workplace Rules and Regulations

Employees should observe the proper working attire and cleanliness in the work
place.
Employees should observe the proper time-in and time-out.
Safety Regulations

Avoid smoking and drinking alcoholic beverage while in the work place.
All equipment must be unplugged before leaving the premises.
Fire protection and safety requirements must be complied with annually.
The office must be securely locked to ensure safety of important files and assets.

Tardiness and Absences

All employees should notify the Commissary Supervisor or Manager of any plans to
absent at least a day before the actual date.
In cases of emergency, they should immediately notify the Supervisor with a valid
reason for absence as soon as possible.

BASIC ACCOUNTING PRINCIPLES

Basic Concepts of Internal Control
Internal Control includes all policies and procedures which:

Prevent fraudulent activities or any misstatements in the Financial Statements;

Maintain reliable and accurate recording and reporting of transactions;
Safeguard assets;
Promotes efficiency of operations;
Ensures proper delegation and segregation of duties;

Components of Internal Control

Requisition Forms
Requisition forms are imperative in the purchase of inventories and raw materials since it
serve as evidence for recording disbursement transaction. This will also give the person
in charge the authority to purchase inventory for the business operations.
Segregation of Duties

53

This is one of the most important controls that the business needs to enforce. The
segregation of employee duties minimizes incompatible functions. The tasks of taking
orders should be separate from the processing of transactions, including the collection of
cash and issuance of Official Receipts. Other tasks such as purchasing of Raw Materials
and Supplies should be separate from the tasks of producing and cooking the precooked
Inventory. The segregation of incompatible tasks should be physical as well as
organizational. The organization should be structured accordingly so as to prevent
collusion between two or more individuals with incompatible responsibilities. Without
proper segregation, an individual with access could withdraw cash and then adjust the
cash account accordingly to hide the transaction.

Supervision
Achieving adequate segregation of duties often presents difficulties for small businesses.
Therefore, in small organizations or in functional areas that lack sufficient personnel,
they must compensate for the absence of segregation controls with close supervision. An
underlying assumption of supervision control is that the firm employs competent and
trustworthy personnel. The competent and trustworthy employee assumption promotes
supervisory efficiency. Firms can thus establish a managerial span of control whereby a
single manager supervises several employees. Maintaining a span of control tends to be
straightforward because both manager and employees are at the same physical location.
Safeguard Assets
The business needs to safeguard their assets to avoid theft. This includes keeping cash in
the cash registry and storing inventories in a secured storage located in the commissary.
File storage and doors should always be locked up at the end of the day.
Authorization of Disbursements
Authorization of disbursements is an internal control which prevents unauthorized
disbursements of cash. This would ensure that all disbursements or any relevant
transactions are valid and known by the manager/owner.
Assertions

54

It is important that all assets, liabilities and equity at the end of the period exist, complete,
properly valued, the cooperative has rights and obligations, properly presented in
financial statements and properly disclosed. Thus the following management assertions
are important.
1. Existence or occurrence assets, liabilities and equity exists at the end of the
period.
2. Completeness all assets, liabilities and equity balances that are supposed to be
recorded have been recognized in the financial statements.
3. Rights & obligations the cooperative has the right to ownership or use of the
recognized assets, and the liabilities recognized in the financial statements
represent the obligations of the entity.
4. Valuation assets, liabilities and equity balances have been valued appropriately.
5. Presentation and disclosure all assets, liabilities and equity balances are properly
presented in the financial statements and disclosed to the notes to the financial
statements.
Responsibility of the Financial Statements
The management is responsible for the preparation and presentation of the financial
statements of the company.

55

PROPOSED ORGANIZATIONAL CHART

Manager/Owner
Mr. Timothy Davis F. Angara

Food Manager

Bookkeeper

Mr. John Dexter

Mrs. Gloria

Commissary

Branch Cooks
Branch

Purchasers

Commissary

-Locsin Branch
-Robinsons
Branch

-Locsin Branch
-Robinsons
Branch

56

PROPOSED JOB DESCRIPTION AND JOB SPECIFICATION

Position
Owner/Manager

Job Description
Manages the business as

a whole
Approves

Job Specification

and

authorizes transactions
especially those that are

material
Monitors the financial

stability of the business

Reviews the store and
commissary blue books,
and

Food Manager

other

documentations

and

forms daily.
Interviews and

hires

their employees.
Researches new flavors

and products to be sold

Tests
the
newly
developed

Good taste in food

Preferably college level

Has
accounting

products

before introducing it to
Bookkeeper

the market.
Prepares
daily,

monthly and yearly reports.

Submits reports to BIR
Furnishes a copy of the

weekly,

background, minimum
of

report to the owner/manager

two

years

accounting

of
or

bookkeeping experience
including,
general

payroll,
ledger

and

financial reports.
Ability to perform
57

several

tasks

concurrently with ease

Commissary

Oversees the production

process of pocket pies

Monitors
the

Supervisor

performance
employees

of
in

delegate tasks, and make

the

sound

the

while maintaining a focus on

commissary
Records the number of
pocket pies produced

and professionalism.
Strong leadership skills
Has the ability to prioritize,
decisions

quickly

the bottom line.

per day
Estimates the number of

Trustworthy
Proven experience in
managing people

pies to be produced

everyday
Guides the commissary
cooks and purchasers in

their assigned tasks

Submits
commissary
bluebook

Commissary

Cooks

to

owner/manager
Pays the monthly bills
Assigned
in
the

Observes

personal hygiene
Experience in preparing

food and in cooking

Trustworthy
Has
good

communication skills
Knows how to bargain
Has the ability to

production process of
pocket pies

Purchaser

Counts the remaining

inventory stock every
day and subsequently
records

it

in

the

commissary blue book

Lists any stock or

inventory items needed

Orders new stocks

proper

choose products that are

of good quality

58

(beverages,

hotdog,

fries, buns, etc) from

suppliers when reorder

level is reached
Purchases the needed
fresh ingredients for the

Cook

pocket pies every day

Receives and prepares

customer orders
Cooks customer orders

Observes

personal hygiene
Experience in preparing

(deep-fries the pocket

proper

food and in cooking

pies)
Signals the purchasers
of

the

stocks

that

already reached their

buffer/reorder levels
Counts
the
stocks
delivered and records it

Cashier

in the store blue book

Receives cash payments

from customers
Records any cash sales

Trustworthy
Financially literate

or receipts in the store

blue book
Disburses money to the
purchasers to buy the

necessary supplies
Records
any
cash
disbursements

store blue book

Counts
the

in

the

stocks

delivered and records it

in the store blue book

Submits store blue book
59

to owner/manager
PROPOSED CHART OF ACCOUNTS
Statement of Financial Position
ASSETS
No.

Account Title

Current Assets
100 Cash and Cash Equivalents
10 Cash

Normal

Debit

1
10

Description

Balance

Refers to the cash on hand and

unrestricted for the use of business

Petty Cash Fund

Debit

operations
This account is used to record funds
to pay minimal cash disbursements.
All petty cash payments shall be
evidenced or supported by duly
accomplished and approved petty

10
3
12

Cash in Bank
Accounts Receivable

0
130 Inventory
13 Merchandise Inventory

Debit

cash vouchers.
Refers to the cash of the business

Debit

that was deposited in a bank account

Refers to a claim against a customer

Debit

Refers to the inventories that are

held for sale in the normal course of

business such as pocket pies, fries,

13

Raw Materials Inventory

Debit

hotdog, buns, etc.

Refers to goods and materials on

hand

13

production.
Refers to goods that are only

Work in Process Inventory

Debit

but

not

yet

partially

13

precooked pocket pies.

Refers to goods completed and

Debit

such

into

3
Finished Goods Inventory

processed

paced

as

60

4
14
0
15

Prepaid Rent
Advances for Payroll

Debit

cooked but not yet sold.

Refers to the prepayment of rent that

Debit

has to be incurred for future use.

Refers to prepayment of payroll to

employees

Non-current Assets
170 Property, Plant and Equipment
17 Store Equipment
Debit

Refers to the tangible items owned

by the business that are held for use

for

business

operations.

This

includes cash register, calculator,

17

Accumulated Depreciation Credit

water dispenser etc.

Contra-asset account which refers to

Store Equipment

the decrease of usefulness on the

17

Commissary Equipment

Store Equipment.
Refers to the tangible items owned

by the business that are held for use

in production or supply of finished
goods inventory. This includes cash

17

Accumulated Depreciation Credit

freezer, chiller, etc.

Contra-asset account which refers to

Commissary Equipment

the decrease of usefulness of the

Furniture and Fixtures

Commissary Equipment.
Refers to the tangible items owned

17

Debit

by the business that are held for use

for

business

operations.

This

includes shelves, display fixtures,

17

Accumulated

Depreciation- Credit

Furniture and Fixtures

cabinets, desks and tables

Contra-asset account which refers to
the decrease of usefulness of the
Furniture and Fixtures.

LIABILITIES
No.

Account Title

Normal

Description
61

Balance
Current Liabilities
20 Accounts Payable

Credit

Refers to the amount that the

0
22

Salary and Wages Payable

Credit

business owes to its creditors.

Refers to the obligation to its

0
23

Tax Payable

Credit

employees that is accrued

Refers to the tax obligation of the

business

OWNERS EQUITY
No.
30

Account Title
D. Angara, Capital

Normal
Balance
Credit

Description
Refers to the residual amount of the

business after all liabilities are

31

deducted; Working capital

Refers to the amount of withdrawals

D. Angara, Drawings

Credit

made by the owner.

Statement of Financial Performance (Income Statement)

REVENUES
No.

Account Title

Normal

400

Sales

Balance
Credit

420

Other Income

Credit

Description
Refers to sales of merchandise
inventory
Refers to

sale

of

fully

depreciated fixed assets

EXPENSES
No.

Account Title

Normal

50

Utilities Expense

Balance
Debit

0
51

Rent Expense

Debit

0
52

Description
This account includes electricity,
water and WiFi expenditure
Refers to the rent incurred in the
business store and in Robinsons

Salaries and Wages Expense

Debit

stall
Refers to the salaries and wages
62

0
53

Depreciation Expense

Debit

incurred
Refers to the amount of depreciation
that the business charged to expense
over the useful life of all its property,

54

Tax Expense

Debit

plant and equipment

Refers to the tax incurred

0
55

Miscellaneous Expense

Debit

Refers

to

the

immaterial

expenditures of the business

PRO-FORMA FINANCIAL STATEMENTS

Pro Forma Balance Sheet
Massive Munchies Snackbar
Pro Forma Balance Sheet
Date
ASSETS
Current Assets
Cash and Cash Equivalents
Cash on hand
Petty Cash
Cash in Bank
Accounts Receivable
Inventories
Merchandise Inventory
Raw Materials Inventory
Work-In Process
Finished Goods
Prepaid Rent
Advances from Employees
Total Current Assets
Non-Current Assets
Fixed Assets
Store Equipment
Less: Accum. Depreciation
Commissary Equipment
Less: Accum. Depreciation
Furniture and Fixtures

xx
xx
xx
xx
xx
xx
xx

xx
xx

xx
xx
xx
xxx

xx
(xx)
xx
(xx)
xx

xx
xx
63

Less: Accum. Depreciation

Total Non-Current Assets
TOTAL ASSETS

(xx)

xx
xxx
xxx

LIABILITIES AND OWNERS EQUITY

Current Liabilities
Accounts Payable
Salaries and Wages Payable
Tax Payable
Total Current Liabilities

xx
xx
xx
xx

Non-current Liabilities
Total Non-current Liabilities
TOTAL LIABILITIES

xx
xx
xxx

OWNERS EQUITY
Angara, Capital
Angara, Drawings
TOTAL OWNERS EQUITY

xx
(xx)
xxx

TOTAL LIABILITIES AND OWNERS EQUITY

xxx

Pro Forma Income Statement

Massive Munchies Snackbar
Pro Forma Income Statement
Date
Revenues
Sales
Other Income
Total Revenues
Expenses
Utilities Expense
Electricity
Water
Internet Connection

xx
xx
xxx
xx
xx
xx

xx
64

Rent Expense
Depreciation Expense
Salaries and Wages Expense
Tax Expense
Miscellaneous Expense
Total Expenses
Net Income

xx
xx
xx
xx
xx
(xxx)
xxx

Pro Forma Cash Flow Statement

Massive Munchies Snackbar
Pro Forma Cash Flow Statement
Date
Cash Flows from Operating Activities
Net Income
Adjustments
Depreciation Expense
Gain on sale of Equipment
Increase in Accounts Receivable
Decrease in Inventory
Increase in Accounts Payable
Net Cash Flows from Operating Activities
Cash Flows from Investing Activities
Sale of Equipment
Purchase of Equipment
Net Cash Flows from Investing Activities

xxx
xx
(xx)
(xx)
xx
xx
xxx
xx
(xx)
xxx

Cash Flows from Financing Activities

Net Cash Flows from Financing Activities

xxx

Increase / (Decrease) in Cash

Cash, beginning balance
Cash, ending balance

xx
xx
xxx

65

Pro Forma Statement of Changes in Owners Equity

Massive Munchies Snackbar
Pro Forma Statement of Changes in Owners Equity
Date
Beginning balance Angara, Capital
Add: Additional capital contributions
Net Income
Deduct: Debit balance Anggara, Drawings
Ending balance Anggara, Capital

xxx
xx
xx
(xx)
xxx

Proposed Accounting System

66

Revenue Cycle
CASH RECEIPTS FLOWCHART (Main Store/Branch)
Cook

Start

Cashier

Commissary Supervisor

Receives
Payment from
customers

Cash
Receipts Blue
Book

Receives Customer
Order

Daily Cash Remittance Receives

Report
reconciled
Cash Receipts Blue Book report
Cash Disbursement Blue
Book
Inventory Blue Book

Records Customer
Order
Issues Receipts
Reconciles all the
Blue Book with the
Report

Inventory
Blue Book
Receipts/Sales
Invoice

Prepares Cash
Remittance
Report

Daily Cash
Remittance Report
Daily Cash
Remittance
Report

67

CASH RECEIPTS (Main Store/Branch)

PERSONNEL INVOLVED

FUNCTIONS IN THE CYCLE

COMMISSARY PERSONNEL

Cook

CASH REC
(D

Takes orders from customers

Records the orders of customers in the

Inventory Blue Book

COMMISSARY SUPERVISOR
Cooks and prepares other orders from
customers

Start

Report
orders and records
subsequently in the

Daily Delivery
Report
Cash Receipts Blue Book

Delivery of
inventory

Cashier

Approval of
Delivery Form
from the receiver

Receives payment
from prior delivery
of inventory

Takes cash payments

from customer
Cash Remittance

Places the cash received in the cash

register
Issues Receipts/Sales

Invoice

to

Cash Remittance

Report
customers
Daily Delivery
Prepares Daily Cash Remittance
Prepares Report
Daily
Report
Delivery
and Cash
Remits the Daily Cash
Remittance

Delivery
Remittance Report
Delivery
Form Report to the Commissary Supervisor
Form
Obtains Daily Cash Remittance Report

at the end of the day Cash Remittance

Reconciles Inventory,
Cash Receipts
Report

Cash Remittance
Delivery
Commissary Supervisor
Delivery
and Cash Disbursement Blue Book with
Form
Report

Submits cash received

together with Delivery
Form

Form
Delivery
Delivery
the Daily Cash Remittance Report
Form
Form
Hand-overs the reconciled report and

cash to the owner/manager

Receives the cash and report from the
CASH RECEIPTS (Distributor)
Commissary Supervisor
Asks for updates regarding the business
Owner/Manager
PERSONNEL INVOLVED
FUNCTIONS IN THE CYCLE
and employees

68

Commissary Personnel

Delivers the finished goods to different

distributors
Requires the receiver to approve and

sign the Delivery Form

Receives cash as payment

inventory sold from previous delivery

Submits cash together with Cash

from

Remittance and Delivery Forms to

Commissary Supervisor

Owner/Manager

Commissary Supervisor
Obtains the Cash Remittance

Delivery Forms at the end of the day

Prepares Daily Cash Remittance and

Daily Delivery Reports

Hand-overs the Reports

owner/manager
Receives the Reports from commissary

supervisor
Asks for updates and reports regarding

to

and

the

the business and employees

Proposed Accounting System

69

Conversion Cycle

Commissary
Personnel
Transfer of
ingredients from
storage to production
area

Commissary
Personnel

CONVERSION CYCLE
Commissary
Commissary
Personnel
Personnel

Commissary
Supervisor

Storing in the
freezer

Cooking of the
filling
Forming the
flavored pocket and
dessert pies

Preparation of
ingredients

Delivery
Form

Crust making

Assigning colors to
the finished products
Dough making

Dough rolling
using the rolling
machine

Physical count of
the finished
products

Commissary
Production
Report

Dough cutting
into circles

70

PERSON INVOLVED

CONVERSION CYCLE
FUNCTION IN THE CYCLE
Commissary personnel transfer the raw materials
from the storage to the working area to start the

production of flavored pocket and dessert pies.

Raw material ingredients are prepared and assigned to

each different process in the production area.

The flavored and dessert fillings are cooked using a

large casserole. Each flavor takes 1-3 hours to cook.

Crust making involves three steps. First is the dough
making. One commissary personnel is assigned to
make the dough. The finished dough is then
transferred to the next step which is the dough rolling.

Commissary Personnel

Here the dough is flattened using the rolling machine.

Lastly, the flattened dough is cut into small circles

ready for pie formation.

The cooked flavored and dessert fillings are then
placed inside the flattened-circle dough and then

formed into pocket pies.

The finished pocket pies are assigned with designated

colors to segregate one flavor from the other.

A Commissary Personnel is then assigned to deliver
the finished products to the branches.

The finished products are then inspected by the

Commissary Supervisor for any defects and counted
and

Commissary Supervisor

subsequently

records

in

the

Commissary

Production Repport
Finished products are placed inside the freezer ready
for delivery on the next day.

71

Proposed Accounting System

Disbursement Cycle

PURCHASE OF RETAILED INVENTORY (Store)

Cashier

Manager

Purchaser

Physical count of
retailed goods on
hand

72
Pays cash to the
supplier of retailed
goods

Purchase
Request

Approval of
Purchase
Request

Inventory
Blue Book

Requisition
Requisition

Requisition

PURCHASE OF Form
INVENTORY IN THE STORE
Form
Enters result
PERSON INVOLVED
FUNCTIONS IN THE CYCLE
of inventory
count

Form

Gives cash to
the Cashier

Responsible for the physical count of the retailed goods at

Purchase of retailed
the beginning of the day.
goods from the supplier
The results of the physical count shall then be recorded in

Enters result
of inventory
count

the Blue Book which serves as evidence to be used in later

Inventory
Blue Book

reconciliation.
The
Cashier will also request for additional purchase of
Gives cash to the
Purchaser
andgoods
a copy offrom
retailed
requisition form

Cashier

Physical count of retailed

goods purchased
A

the Manager. A requisition form is

Purchase

needed in such request for documentation purposesReceipt

as

Receiving
Report

Purchase
well
Receipt
as control.

The Cashier will receive any source documents (a copy of

Cash

Disbursement Blue
requisition
form, receiving report, purchase receipts)
Book

relative

to

the

purchase

of

retailed

goods

for

Receipt of retailed goods

purchased

A
Receivingdocumentation.
Report

Manager

Records the disbursement in the Cash Disbursement Blue

Book
He is responsible for the approval of any purchase request
from the Cashier. And upon the approval, he will then give

cash to the Cashier.

A Purchaser is a personnel assigned to purchase any

needed retailed goods in the store.

PURCHASE
RAW
MATERIALS
IN THE
He will OF
receive
the
requisition form
and COMMISSARY
cash for the
Commissary Supervisor
Manager
Purchaser
purchase of additional retailed goods.
He goes to the supplier to personally buy the retailed
goods. The supplier will then deliver the goods to the
Purchase

Purchaser

Cook

store. Request
Upon delivery of the retailed goods to the store, the carrier
will furnish a delivery report which will then serve as the
receiving report on the part of the personnel assigned to
Requisition
receive the goods.
The purchase receipt from the acquisition will then be Form
73
remitted to the Cashier for recording.
The cook is designated to receive the goods purchased for
internal control purposes. He will also do the physical
count and record the results in the Blue Book.

Physical count of raw

materials on hand

Enters result
of inventory
count

Approval of
Purchase
Request

Requisition
Requisition
Form
Form
Gives cash to
the
Commissary
Supervisor

Inventory
Blue Book

Purchase of raw materials

from the supplier

Purchase
Receipt
Gives cash to the
Purchaser and a copy of
requisition form
A
Purchase
Receipt

Cash
Disbursement
Blue Book

Pays cash to the

supplier of raw
materials

Does the purchaser bring the raw

materials to the commissary?
Receiving
Report

Receipt of raw
materials purchased

NO

A
YES

Enters result
of inventory
count

Physical count of raw

materials purchased

Delivers the purchased raw

materials to the commissary

74

PURCHASE OF RAW MATERIALS IN THE COMMISSARY

FUNCTIONS IN THE CYCLE
PERSON INVOLVED

The Commissary Supervisor is in charge of the inventory count

of raw materials in the production site at the beginning of the

Commissary Supervisor

day.
The results of the inventory count shall be recorded I the blue

book for later reconciliation as well as control purposes.

He is also responsible for making the requisition form to be sent

to the Manager for approval.

He will receive the cash from the Manager and gives it together

with the requisition form to the Purchaser.

The Commissary Supervisor will receive any source documents
(a copy of requisition form, receiving report, purchase receipts)

relative to the purchase of retailed goods for documentation.

Records the any cash disbursement in the Cash Disbursement

Blue Book
He is responsible for the approval of any purchase request from

Manager

the Commissary Supervisor. And upon the approval, he will then

Purchaser

give cash to the Commissary Supervisor.

A Purchaser is a personnel assigned to purchase any needed raw
materials in the commissary.
He will receive the requisition form and cash for the purchase of
additional raw materials.
He goes to the supplier to personally buy the raw materials and
he can either bring the purchased goods to the store or let the
supplier deliver the goods to the store.
Upon delivery of the raw materials to the store, the carrier will
furnish a delivery report which will then serve as the receiving
report on the part of the personnel assigned to receive the goods.
The purchase receipt form the acquisition will then be remitted to
the Commissary Supervisor for recording.

SALARIES AND WAGES (Direct Employees and from Agency)

Cashier/Cook
Owner/Manager
75

Start

Requests for
Cash
Advance

Approves Cash
Advance

Prepares
Withholdings
for all
employees

Owners Record
Cash
Advance
(CA) Form

Approved CA
Form

Salary
Withholdings

Process for
Payroll

Daily Time
Record
(DTR)

B
Daily Time
Record
(DTR)

Computes Net Salary = Weekly

Withholdings - Salary Cash
Advance

Monthly Billings
from the Agency

Net Salary

Payment of
Salary and
Wages and
Agency Billings

Owners
Records

SALARIES AND WAGES (Direct Employees and Agency Billings)

PERSONNEL INVOLVED
FUNCTION/S IN THE CYCLE
76

Requests for their Cash Advance (CA) and

shall fill up the CA Form

Process their own payroll and give their DTR
to the owner as basis for the computation of

Cashier/Cook

their salary
Endorses the Monthly Billings from the
Agency to the owner/manager.

Approves any CAs from direct employees,

keeps the approved CA Form and records it

in its own Book to keep track on the changes.

Computes the Net Salary and Wages based
on the DTR given by employee and any cash

Owner/Manager

advance (Weekly salary - cash advances).

Pays the salary to the employees and the
Monthly

Billings

from

the

Agency.

Subsequent recording in its own book is also

Bookkeeper

necessary.
Prepares Salary

Withholdings

for

all

employees which is to be deducted from the

Weekly Salary

SALARIES AND WAGES (Commissary Department)

Commissary Personnel

Commissary
Supervisor

Owner/Manager

77

Start
Approves
Cash
Advance

Requests for
Cash
Advance

Owners Record

Cash Advance
(CA) Form

Cash Advance
(CA) Form

Prepares
Withholdings
for all
employees

Approved CA
Form

Salary
Withholding
s

Process for
Payroll
Daily Time
Record (DTR)
Daily Time
Record (DTR)

Computes Net Salary =

Monthly Salary Withholdings
Cash Advance

Approves
Payroll

Net Salary

Payment of Salary
and Wages

Cash Disbursements
Book

SALARIES AND WAGES (Commissary Department)

PERSONNEL INVOLVED
FUNCTION/S IN THE CYCLE
Commissary Personnel
Requests for their Cash Advance (CA)
78

and shall fill up 2 copies of CA Form

The copies of CA Form is forwarded to
the Commissary Personnel for approval

of the owner/manager
Process their own payroll and give their
DTR to the Commissary Supervisor as
basis for the computation of their net
salary (monthly salary cash advance)

Commissary Supervisor

Retains 1 copy of CA Form and the

other

is

forwarded

to

the

owner/manager.
Pays the salary to the Commissary
Personnel. Subsequent recording in
Commissary Cash Disbursement Book

Owner/Manager

is necessary.
Approves any CAs forwarded by the
Commissary Supervisor, keeps

the

approved CA Form and records it in its

Bookkeeper

own Book to keep track on the changes.

Approves the payroll provided by the

Commissary Supervisor
Prepares Salary Withholdings for all
employees which is to be deducted
from the Monthly Salary

UTILITIES AND RENT PAYMENT

Commissary Supervisor

Manager

79

Bills
Bills
Monthly
--------Bills
------------------- ----------

Requests for
payment

Enters the
amounts
payable

Approval for
payment of utilities
and rent

Payment
Request
Releases cash to
Commissary
Supervisor for utilities
payment and rental
payment of Locsin
store

Blue
Book

Issues check for

rental payment in
Robinsons stall

Check
Payment of
utilities and
rent

A
A

Check

Official
Receipts

Commissary Supervisor

The Commissary Supervisor is assigned to

80

receive the monthly bills due for rentals and

utilities such as internet, water and electricity.

He is also responsible for making a request for

payment to the Manager.

After the approval, he will receive cash for the
payment of the utilities and rent for both the store
and the commissary. A check will be used to pay

Manager

for the rent in Robinsons branch.

Approves the payment request
Commissary

Supervisor

through

of

the

cash

and

checks.
UTILITIES AND RENT PAYMENT
PERSONNEL INVOLVED
FUNCTION/S IN THE CYCLE

81