ministry of education and training fpt university subject principle of accounting

Chow purchased $2,000 of dispensing equipment.On December 5, the company purchased a $1,500 shop-house to use as first store for cash.On December 8, the company purchased supplies for $1

SUBJECT: PRINCIPLE OF ACCOUNTING

MINISTRY OF EDUCATION AND TRAINING FPT

UNIVERSITY SUBJECT: PRINCIPLE OF ACCOUNTING

Individual Assignment

SUBJECT: PRINCIPLE OF ACCOUNTING 1

I Introduction: 2

II Transactions description: 2

III Transaction analysis: 3

IV Double-entry: 10

V General journal: 12

VI General ledger: 15

VII Trial Balance: 16

VIII.Income Statement: 16

IX Statement of Owner’s Equity: 17

X Balance Sheet: 17

XI Inconclusion: 17

competitors in the world, such as Starbucks Coffee (USA), Costa Coffee (U3K), McCafé (Australia and New Zealand), Trung Nguyen Coffee (Vietnam) However, the demand for customers is getting a rise

Realizing the growing “Food and Beverage Service”, called the F&B industry, Chow Chow, a young entrepreneur, established a coffee brand, New Star Coffee Company, and set up as a proprietorship, focusing on making coffee-based beverages The company's development plan in 3 years is to expand 100 stores nationwide plan in 5 years, NewStar will develop into a popular coffee chain with customers The marketing plan for businesses is to focus mainly on advertising on social networks, inviting people with influence on experience and use of the product

II Transactions description:

Chow Chow launched a new business, New Star Coffee Company, that began operations

on December 1 The following transactions were completed by the company during that first month

On December 1, C Chow invested $5,000 cash in the company

On December 2, C Chow purchased $2,000 of dispensing equipment

On December 5, the company purchased a $1,500 shop-house to use as first store for cash

On December 8, the company purchased supplies for $1,000 cash

On December 10, the first store went into operation First day revenue is $1,000 cash

On December 11, the company bought the second store with $2,000 on credit (using long-term accounts payable)

On December 13, the company received $1,500 cash from the first store's sales The second store went into operation

On December 14, the company paid a $1,600 installment towards the principal on the account payable entered into on December 11

On December 15, second store revenue is $1,500 on account

On December 16, the company paid $1,000 cash for the salaries of the first store employees

On December 17, the company received a check for $1,500 from the previous account

On December 20, the company paid $900 cash for the salaries of the second store employees

On December 21, the company purchased $4,000 of supplies on credit (using note payable)

On December 23, the company received the first store of $ 1,100 cash The second store

in $ 1,900 cash

On December 25, the company paid utilities for both stores $1,500 cash

On December 27, the company paid $800 cash for the second store on December 11

On December 31, C Chow withdrew $950 cash from the company for personal use

The chart of accounts:

III Transaction analysis:

Transaction 1: Investment by Owner

Identify:C Chow invested $5,000 cash in the company

Analyze:

Record:

Post:

Transaction 2: Purchase dispensing equipment by Owner

Identify:C Chow invested $5,000 cash in the company

Analyze:

Transaction 3: Purchase Store for Cash

Identify: NewStar spends $1,500 in cash on a shop-house to open its first store

Analyze:

Record:

Post:

Transaction 4: Purchase Supplies for Cash

Identify: NewStar uses $1,000 cash to buy coffee supplies from the garden to prepare for the grand opening

Analyze:

Record:

Post:

Identify:Thanks to the customer marketing strategy, NewStar had a first-day revenue of

$1,500 in cash

Analyze:

Record:

Post:

Transaction 6: Purchase Store on Credit

Identify: Chow Chow decided to expand the business by building another store located

in the city center According to economists, Chow Chow arranged to buy the shop house with $2,000 on credit from HSBC bank Therefore, the company will take interest to pay each month This results in an increase of $2,000 in assets and liabilities (long-term liabilities) by the same amount The impact of this is as follows:

Analyze:

Transaction 7: Provide Services for Cash

Identify: Like transaction 5, NewStar receives an activity report as well as $1,500 in cash The second store opened on the same day

Analyze:

Record:

Post:

Transaction 8: Payment of Accounts Payable

Identify: NewStar pays HSBC $1,600 as partial payment for a previous $2,000 store purchase (transaction 6), with the remaining $400 outstanding

Analyze:

Transaction 9: Provide Services for Credit

Identify:After the first day of opening, the second store received $1,500

Analyze:

Record:

Post:

Transaction 10: Payment of Salaries Expense in Cash

Identify: NewStar pays employees twice a month The employee's salary at the first store

is $1,000 cash Wages are expenses, as opposed to assets, as their benefits are used in December (they have no future benefits after December)

Analyze:

Transaction 11: Receipt of Cash from Accounts Receivable

Identify: NewStar took the profits of the second store (transaction 9) out to $1,500 in cash This transaction 11 does not change total assets and does not affect liabilities or equity

Analyze:

Record:

Post:

Transaction 12: Payment of Utilities Expense in Cash

Identify: Similar to transaction 10, NewStar pays employees at the 2nd store $900 in cash after half a month of work

Analyze:

Record:

Transaction 13: Purchase Supplies on Credit

Identify: NewStar needs a fixed supply of coffee to maintain operations Drai Farm, a large coffee farm, Chow Chow buys them on short-term credit (called note payable) Analyze:

Record:

Post:

Transaction 14: Provide Services for Cash

Identify: Like transaction 5&7, NewStar receives the first store of $ 1,100 cash The second store in $ 1,900 cash

Analyze:

Record:

Transaction 15: Payment of Utilities Expense in Cash

Identify: NewStar pays utilities (electricity and water bills) for both stores $1,500 cash

Analyze:

Record:

Post:

Transaction 16: Payment of Note Payable

Identify:NewStar pays $800 cash for the second store on December 11 (Transaction 13)

Analyze:

Transaction 17: Withdrawal of Cash by Owner

Identify: C Chow withdrew $950 cash from the company for personal use

Analyze:

Record:

Post:

V General journal:

- Page 1:

VI General ledger:

VIII Income Statement:

IX Statement of Owner’s Equity:

X Balance Sheet:

XI Inconclusion:

After one month of operation, NewStar has a net profit of $3,600 The number is quite small compared to the cost, possibly because it is a coffee chain model that needs costs to decorate In the new coffee chain market, it is difficult to make a high profit at first Brands need more time to have a fixed customer segment The total cost ($3,400) is almost half of the profit ($7,000) indicating that the costs incurred are quite high NewStar needs to review expenses and adjust In addition, the company also considers marketing strategies such as discounts or gift vouchers for loyal customers The main purpose is to attract customers to increase profits for the company