Recording Business Transactions BA30592E1 | P a g eUNIVERSITY OF WEST LONDONThe Claude Littner Business SchoolRecording Business transactionAssignment A2Submission Deadline: 25th January 2021 at 11:59 pm.Part ALinda started the business of buying and selling toys in Oxford on the 1st of October 2020.She is preparing accounts to 31st October 2020. She contributed to the business with £8,000in the Bank, £5200 cash, and 3,000 Van. The transactions during the month are as follows:2/10 Bought a new Laptop £1000 from a local shop in Oxford and paid by cheque4/10 Purchased toys (goods) £2450 on credit from Toys Ltd5/10 Sold goods for £ 1500 and received the money in Bank12/10 Paid in Cash £80 for repairing laptop18/10 Goods returned to Toys Ltd £10021/10 Received rent for part of the premises by cheque £50023/10 Sold goods to Fred £1900; from this amount £1500 cash received immediately andthe rest remains on credit.23/10 Sold goods of £500 to David and received cash24/10 Bought a second-hand car from Oxford motor vehicle auction for business use byissuing a cheque £250026/10 Paid ƚhe monƚh͛s ǁages to the part-time shopkeeper by cheque £82030/10 Paid rent by cheque £100031/10 Linda has also paid £1600 from the business bank account for a week-long holiday inFlorida. She has asked you whether she can class this as business expenses since it hasenabled her to recover from the stresses and strain of running her own business.Required:a) Write double entry record the transactions in T-accounts 19 marksRecording Business Transactions BA30592E2 | P a g eb) Balance the accounts and bring down an opening balance 8 marksc) Extract a Trial balance as at 31st October 2020 16 marksd) Prepare an Income Statement for the period ended 31st October 2020 13 marksThe closing inventory is £ 250.00e) Prepare a Statement of Financial Position as at 31st October 2020 15 marksf) Write a brief letter to Linda explaining what drawings are concerning small business and answering her query concerning her holiday.5 markTotal Marks 76 PART Bi. According to the information available in Income and Financial position statementsin Part A, calculate the following ratios for Linda͛s bƵsinessCompetitors Averagex Net profit margin 31%x Gross profit margin 54%x Current ratio 2.87xx Acid test ratio 1.35xx Accounts receivable collection period 50 daysx Accounts payable payment period 72 days(12 marks)ii. Assuming Linda͛s compeƚiƚor͛s raƚio aǀerages are as stated above: Analyse herperformance with reference to each of the ratios calculated in comparison to those ofher competitor. (Maximum of 500 words).(12 marks)(Total 100 Marks)Recording Business Transactions BA30592E3 | P a g eIMPORTANT INFORMATIONWord countThe assignment must not exceed 2,000 words.Pass mark and weighting of the assignmentTo pass the assignment you need a mark of at least 40%. The assignment carries a 60 %weighting towards your final mark for the module.Hand in dateAll assignments must be submitted on Turnitin by the due date. Any late submissions will besubject to the penalties laid out below.Work handed in up to 5 days late will be awarded a maximum of 40 %. Work handed in afterthat will be given zero.Student supportAt the end of each seminar, there will be five minutes free to discuss any problems orambiguities in the assignment with the group.PlagiarismThe software checks assignments against other assignments as well as articles and internetsoƵrces so LJoƵr assignmenƚ mƵsƚ noƚ be ƚoo similar ƚo oƚher sƚƵdenƚs͛ assignmenƚs as ǁellas not being too closely extracted from articles and on-line sources.Important tip: You can submit drafts through Turnitin and ǀieǁ ƚhe ͞originaliƚLJ reporƚ͟which will indicate the similarity your assignment has with other sources.
