Answer To: ACC201_T2_2020_Assessment_3 Page 1 XXXXXXXXXXKaplan Business School Assessment Outline Assessment 3...
Abr Writing answered on Sep 23 2021
Xpress Cuts - Balance Sheet.pdf
Balance Sheet
Balance Sheet | Xpress Cuts | 17 October 2020 Page 1 of 1
Xpress Cuts
As at 31 October 2019
31 Oct 2019
Assets
Bank
Business Bank Account 114,781
Total Bank 114,781
Current Assets
Accounts Receivable 13,301
Prepayments 3,630
Total Current Assets 16,931
Fixed Assets
Computer Equipment 2,455
Office Equipment 5,000
Total Fixed Assets 7,455
Total Assets 139,167
Liabilities
Current Liabilities
Accounts Payable 8,927
Accrued Expenses (4,250)
GST 8,360
Rounding -
Total Current Liabilities 13,036
Total Liabilities 13,036
Net Assets 126,130
Equity
Current Year Earnings 90,130
Owner A Share Capital 36,000
Total Equity 126,130
Balance Sheet
Assurance_Dashboard.docx
Xpress Cuts - Profit and Loss.pdf
Profit and Loss
Profit and Loss | Xpress Cuts | 17 October 2020 Page 1 of 1
Xpress Cuts
1 October 2019 to 31 October 2019
31 Oct 19
Income
Sales 118,808
Total Income 118,808
Less Cost of Sales
Cost of Goods Sold 21,660
Total Cost of Sales 21,660
Gross Profit 97,148
Less Operating Expenses
Advertising 550
Consulting & Accounting 91
Entertainment 280
Motor Vehicle Expenses 109
Rent 5,455
Subscriptions 409
Telephone & Internet 90
Travel - National 34
Total Operating Expenses 7,017
Net Profit 90,130
Profit and Loss
Xpress_Cuts_-_Company_Financial_&_Liquidity_Position.rtf
Xpress Cuts
Company Financial and Liquidity Status
Xpress cuts is hair salon start up by Mary Smith as sole trader in Melbourne Central. For the purpose of examining the financial position of the company financial statements i.e. Balance sheet and Profit and loss A/c and ratios play a key role. Below are the key ratios which helps in determining the company’s financial and liquidity status: -
Working capital Ratio – It helps in identifying the company’s ability to meet its current liabilities requirement with current assets.
Working capital Ratio = Current Assets/Current Liabilities
=16931/13026
=1.3
Working capital ratio of Xpress cuts is higher than 1 hence it can fairly be interpret that company is in good position to meet its current liabilities requirements.
Quick Ratio – It depicts coverage of current liabilities by cash or ready cash value Items
Quick Ratio = (Current Assets – Inventory)/Current Liabilities
=16931/13036
=1.3
Since Quick ratio is also higher than one company is able to pay off its liabilities with cash or ready cash current assets
Gross Profit Ratio – This helps in measuring the manufacturing or marketing efficiencies.
Gross Profit Ration = Gross Profit/Sales
=97148/118088
=82.26%
This is sound percentage showing that our of total sales approx. 82% is gross margin available for operating exp.
Net Profit Ratio – This ratio helps in determining the overall profitability of the company
Net Profit Ratio = Net Profit/Sales
=90130/118088
=76.32%
76% of net profit ratio shows the effectiveness of Mary smith in operating Xpress cuts. The ratio can be considered fairly good in any industry being profit bought as bottom line
Return on assets – This ratio helps in understanding the company’s ability to deploy its assets for the purpose of revenue generation
Return on Assets = Net income / Total assets
= 90130/139167
= 64.76%
Xpress Cuts is operating with 64.76% return on assets , a low ROA shows the inefficiencies of the management while high ROA shows efficiency in asset deployment and management being used for the purpose of business
Return on Investment – This ratio helps in understanding the company’s efficiency in deploying its capital into the company.
Return on Investment=Net Income/Owner’s Equity
=90130/126130
=71.5%
Clearly, Xpress cuts is operating with high return on Investment
Conclusion
As can be observed Xpress cuts is working with high liquidity ratios hence it is in sound position to pay off its current liabilities with current assets. Company is also maintaining high gross profit and net profit margin hence it shows company is operating with high efficiency. Further high return on assets and Investment shows its assets and capital is deployed efficiently in the Xpress cuts.
Xpress_Cuts_-_Account_Transactions.pdf
Account Transactions Xpress Cuts
Account Transactions
Xpress Cuts
For the period 1 October 2019 to 31 October 2019
DATE SOURCE DESCRIPTION REFERENCE DEBIT CREDIT RUNNINGBALANCE GROSS GST
Accounts Payable
Opening Balance - - - - -
1 Oct 2019 Payable Invoice Pinnacle Real Estate - 6,000.01 6,000.01 6,000.01 -
1 Oct 2019 Payable Payment Payment: Hair Warehouse 2,800.00 - 3,200.01 (2,800.00) -
1 Oct 2019 Payable Invoice Hair Warehouse - 6,222.16 9,422.17 6,222.16 -
2 Oct 2019 Payable Invoice Hair Warehouse - 1,900.00 11,322.17 1,900.00 -
2 Oct 2019 Payable Payment Payment: Hair Warehouse 1,900.00 - 9,422.17 (1,900.00) -
3 Oct 2019 Payable Invoice Hair Warehouse - 3,600.00 13,022.17 3,600.00 -
3 Oct 2019 Payable Payment Payment: Hair Warehouse 3,600.00 - 9,422.17 (3,600.00) -
4 Oct 2019 Payable Payment Payment: Pinnacle Real Estate 6,000.00 - 3,422.17 (6,000.00) -
4 Oct 2019 Payable Invoice Computer and Technology Group - 2,700.01 6,122.18 2,700.01 -
4 Oct 2019 Payable Payment Payment: Computer and Technology Group 2,700.00 - 3,422.18 (2,700.00) -
5 Oct 2019 Payable Invoice Cutting Crew - 899.91 4,322.09 899.91 -
5 Oct 2019 Payable Invoice Cutting Crew - 900.00 5,222.09 900.00 -
8 Oct 2019 Payable Payment Payment: Hair Warehouse 2,800.00 - 2,422.09 (2,800.00) -
8 Oct 2019 Payable Invoice Hair Warehouse - 4,665.12 7,087.21 4,665.12 -
15 Oct 2019 Payable Payment Payment: Hair Warehouse 2,658.10 - 4,429.11 (2,658.10) -
15 Oct 2019 Payable Payment Payment: Cutting Crew 900.00 - 3,529.11 (900.00) -
15 Oct 2019 Payable Overpayment Overpayment: Hair Warehouse - Overpayment 141.90 - 3,387.21 (141.90) -
15 Oct 2019 Payable Invoice Hair Warehouse - 2,658.10 6,045.31 2,658.10 -
22 Oct 2019 Payable Overpayment Allocation Hair Warehouse 141.90 - 5,903.41 (141.90) -
22 Oct 2019 Payable Overpayment Allocation Hair Warehouse - Overpayment - 141.90 6,045.31 141.90 -
22 Oct 2019 Payable Payment Payment: Hair Warehouse 2,800.00 - 3,245.31 (2,800.00) -
22 Oct 2019 Payable Invoice Hair Warehouse - 4,905.12 8,150.43 4,905.12 -
Account Transactions
DATE SOURCE DESCRIPTION REFERENCE DEBIT CREDIT RUNNINGBALANCE GROSS GST
Account Transactions Xpress Cuts
29 Oct 2019 Payable Invoice Hair Warehouse - 3,576.08 11,726.51 3,576.08 -
29 Oct 2019 Payable Payment Payment: Hair Warehouse 2,800.00 - 8,926.51 (2,800.00) -
31 Oct 2019 Payable Invoice HR Specialist - 4,250.00 13,176.51 4,250.00 -
31 Oct 2019 Payable Payment Payment: HR Specialist 4,250.00 - 8,926.51 (4,250.00) -
Total Accounts Payable 33,491.90 42,418.41 8,926.51 8,926.51 -
Closing Balance - 8,926.51 8,926.51 - -
Accounts Receivable
Opening Balance - - - - -
12 Oct 2019 Receivable Invoice Cash Sale Weekends 12/10/19-13/10/19 12,758.01 - 12,758.01 12,758.01 -
14 Oct 2019 Receivable Invoice Cash Sale Weekdays 14/10/19-18/10/19 31,524.00 - 44,282.01 31,524.00 -
14 Oct 2019 Receivable Payment Payment: Cash Sale Weekends 12/10/19-13/10/19 - 12,758.01 31,524.00 (12,758.01) -
18 Oct 2019 Receivable Payment Payment: Cash Sale Weekdays 14/10/19-18/10/19 - 31,524.00 - (31,524.00) -
19 Oct 2019 Receivable Payment Payment: Cash Sale Weekends 19/10/19-20/10/19 - 11,391.00 (11,391.00) (11,391.00) -
19 Oct 2019 Receivable Invoice Cash Sale Weekends 19/10/19-20/10/19 11,391.00 - - 11,391.00 -
21 Oct 2019 Receivable Invoice Cash Sale Weekdays 21/10/19-25/10/19 45,061.00 - 45,061.00 45,061.00 -
25 Oct 2019 Receivable Payment Payment: Cash Sale Weekdays 21/10/19-25/10/19 - 45,061.00 - (45,061.00) -
26 Oct 2019 Receivable Invoice Cash Sale Weekends 26/10/19-27/10/19 16,654.00 - 16,654.00 16,654.00 -
28 Oct 2019 Receivable Payment Payment: Cash Sale Weekends 26/10/19-27/10/19 - 16,654.00 - (16,654.00) -
28 Oct 2019 Receivable Invoice Cash Sale Weekedays 28/10/19-31/10/19 13,301.00 - 13,301.00 13,301.00 -
Total Accounts Receivable 130,689.01 117,388.01 13,301.00 13,301.00 -
Closing Balance 13,301.00 - 13,301.00 - -
Accrued Expenses
Opening Balance - - - - -
31 Oct 2019 Payable Invoice HR Specialist - Wages & Salaries 4,250.00 - (4,250.00) (4,250.00) -
Total Accrued Expenses 4,250.00 - (4,250.00) (4,250.00) -
Closing Balance 4,250.00 - (4,250.00) - -
Account Transactions
DATE SOURCE DESCRIPTION REFERENCE DEBIT CREDIT RUNNINGBALANCE GROSS GST
Account Transactions Xpress Cuts ...