Principles of Accounting
By: shaban • December 21, 2014 • Essay • 1,823 Words (8 Pages) • 1,173 Views
UNIVERSITY OF DAR ES SALAAM
BUSINESS SCHOOL
DEPARTMENT OF ACCOUNTING
GROUP ASSIGNMENT
AC101: PRINCIPLES OF ACCOUNTING II
SEMINAR DAY: WEDNESDAY
SEMINAR HOUR: 10:00-11:00AM
SEMINAR LEADER: DR.MASOUD
PARTICIPANTS:
S/NO NAME REGISTRATION #
1. ABDINOOR AMINA 2010-04-03400
2. ALLY NAILA 2010-04-05059
3. ALI HILDA.O 2010-04-01801
4. EMANUEL VICTORIA 2010-04-01904
5. HABIBU FATUMA.A 2010-04-06832
6. IROKO ZAMDA 2010-04-00884
7. MBWANA SAUDA 2010-04-04529
8. MZEE SHABANI 2010-04-01920
9. NGUSA BIKOLA 2010-04-04197
10. PROCHES JULIUS 2010-04-01589
The name of the business is MKONGWE CAFÉ located at BUGURUNI SHELI, Ilala Dar es salaam. The business is owned by two persons namely Haji Ahmed and Osama with three workers.
The main activities of the business is to provide food services by offering different food items such as Tea, Milk, Chicken soup, Chapatti beans, Buns, Donats, Rice beans, Rice meat, Rice chicken and other food items. They started their business operation in 2010.
The business does not maintain proper accounting records; they do make daily purchase for all items of the cafe and sell almost all food items produced during the day. And at the end of the day they just compare the total purchases plus all the expenses incurred during the day with the sales volume they obtained in order to determine the profit, so they do calculate profit daily.
Apart from the fact that the business does not maintain any proper accounting records but we managed to obtain the data resources of the business at the commencement of the business and the summary of purchases, sales and expenses.
Resources of the business at the beginning
? Shelf 500,000/=
? Tables and Chairs 200,000/=
? Cooking utensils' 500,000/=
? Refrigerator 1,000,000/=
? Cooker 400,000/=
? Wheelbarrow 40,000/=
? Cash 200,000/=
These are the resources contributed by the owners at the beginning of the business which form the initial capital of 2,840,000/=
Also we managed to collect and combine together data concerned with purchases, sales and expenses because there were no records for such items. These data was provided by the owners according to their daily transactions experiences. So we just sum up all the items to obtain the day sales and purchases.
The following is the summary for the total purchases and sales;
Total purchases for a day:
DETALS: COST
Rice 7,500
Meat 12,250
Wheat flours 25,300
Chickens 50,000
Beans 2,250
Sugar 8,500
Cooking oil 25,500
Charcoals 6,000
Spices 7,650
TOTAL PURCHASES 144,950
So from the above data;
Total purchases for the year = 144,950 x 360 days
= 52,182,000/=
(b) Total sales for a day:
DETALS SELLING PRICE
Chapatti 48,500
Donats 40,000
Chicken soup 65,000
Buns 13,200
Rice and meat 30,000
Beans 9,000
Tea 21,600
TOTAL SALES 227,300
Therefore,
Total sales for the year = 227,300 x 360 days
= 81,828,000/=
Then their total expenses for the year are as follows
DETAILS COST
Rent 840,000
Electricity bill 520,000
Wages 2,700,000
Repairs of refrigerator 100,000
New cooking utensils 100,000
Water 360,000
Miscellaneous expenses 500,000
TOTAL EXPENSES 5,120,000
The owners has a tendency of taking from the business 5000/= shillings each daily for personal consumption. Then for the year the owner withdraw the total amount of 3,600,000/= i.e.10000 x 360 days.
From the above data of purchases, sales, expenses and the figure of drawing we manage to introduce cash statement where all cash receipt and cash payment were recorded in order to find the cash balance at the end of tenancy period.
So their cash statement appear as follows,
MKONGWE CAFÉ, CASH STATEMENT
DETAILS SHS SHS
Capital 200,000
Cash sales 81,828,000
TOTAL CASH RECEIVED 82,028,000
Purchases 52,182,000
Electricity bill 520,000
Water 360,000
Repairs of refrigerator 100,000
New cooking utensils 100,000
Rent 840,000
Drawings 3,600,000
Wages 2,700,000
Miscellaneous expenses 500,000 (60,902,000)
Closing balance 21,126,000
After preparation of the above summary then the next step is to determine performance of the business i.e. is the business profitable by constructing the Statement of Comprehensive Income for the period of operation
The following is their Statement of Financial Position for the year ended 30thApril 2011.
MKONGWE CAFE
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30TH APRIL 2011
SHS SHS
Sales 81,828,000
Less: Cost of goods sold
Purchases 52,182,000
Less: Closing stock 289,900 (51,892,100)
GROSS PROFIT 29,935,900
Less: Operating expenses
Electricity bill 520,000
Repairs of refrigerator 100,000
Water 360,000
Rent 840,000
Wages 2,700,000
Miscellaneous expenses 500,000
Depreciation: Freezer 100,000
Cooker 80,000
Chairs and tables 50,000
Shelf 25,000
Wheelbarrow 2,000
Cooking utensils 150,000
Total Operating Expenses 5,427,000
NET PROFIT 24,508,900
Then after determination of net profit we put in order
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