-
+1 - 312-224-1615
Get in touch with us
-
support@helpwithassignment.com
Send us an e-mail
Solution Library
Prepare And Review Cash Flow, Income And Balance Sheet Statements
Question
For this question, you are provided with basic financial information about a fictional company and are asked to prepare three financial statements for the company. You are then required to discuss the financial health and position of the organization.
Below, you will find two important documents: the opening statement of financial position and a provisional trial balance for the fictional company.
Remember that the trial balance has been prepared at the end of the year, but note that the retained earnings and inventories balances included are still those figures relating to the start of that year.
Additional information:
An inventory count established that the value of closing inventories on 31 December 2009 was £6,000.
All of the dividends declared during 2009 (and charged as an expense) were paid in that same year, as was the interest expensed for 2009.
|
Statement of financial position as at 31 December 2008 |
|
|
|
|
|
|
|
|
£ |
£ |
|
Non-current assets |
|
|
|
Land |
|
10,000 |
|
Buildings |
15,000 |
|
|
Less: Accumulated depreciation |
(8,000) |
|
|
|
|
7,000 |
|
Investments |
|
12,000 |
|
|
|
29,000 |
|
Current assets |
|
|
|
Inventories |
4,000 |
|
|
Accounts receivables |
5,000 |
|
|
Cash and cash equivalents |
68,000 |
|
|
|
77,000 |
|
|
|
|
|
|
Current liabilities |
|
|
|
Accounts payable |
25,000 |
|
|
Tax payable |
5,000 |
|
|
|
30,000 |
|
|
Net current assets |
|
47,000 |
|
|
|
|
|
Total assets less current liabilities |
|
76,000 |
|
|
|
|
|
Equity |
|
|
|
Common stock |
|
50,000 |
|
Retained earnings |
|
26,000 |
|
|
|
76,000 |
|
Trial Balance: 31 December 2009 |
£ |
£ |
|
Accounts |
Debit |
Credit |
|
Cash and cash equivalents |
57,000 |
|
|
Sales revenues |
|
95,000 |
|
Purchases |
22,000 |
|
|
Long-term investment |
15,000 |
|
|
Accounts payable |
|
19,000 |
|
Opening inventory (01.01.09) |
4,000 |
|
|
Land |
10,000 |
|
|
Buildings |
18,000 |
|
|
Accumulated depreciation |
|
9,000 |
|
Accounts receivable |
10,000 |
|
|
Depreciation expense |
1,000 |
|
|
Utilities expense |
20,000 |
|
|
Tax expense |
3,000 |
|
|
Interest expense |
1,000 |
|
|
Tax payable |
|
2,000 |
|
Wages expense |
40,000 |
|
|
Common stock |
|
50,000 |
|
Retained earnings at start of year (01.01.09) |
|
26,000 |
|
Totals |
201,000 |
201,000 |
Required:
1. Using the above information, prepare an income statement for the company for the year to 31 December 2009.
2. Prepare a statement of financial position for the company as at 31 December 2009.
3. Prepare a cash flow statement for the company for the year to 31 December 2009, using the indirect method and in accordance with IAS 7.
4. Discuss what inferences can be drawn from the above three statements in relation to the company’s financial position.
Summary
The question belongs to Finance and it discusses about the preparation of required financial statements such as income statement, balance sheet and cash flow statement and the inferences that can be drawn from the statements.
Total Word Count 286
WHAT OUR STUDENTS SAY
Math is one of the most adaptive subjects to the online classroom. With a multitude of tools and ways to communicate, math tutoring online with TheReliableTutor has proven to help students like me make incredible improvements in overall math performance as well as on specific tests and exams.
Debbie Borge Student
I chose civil engineering for my graduate studies because I am fascinated with the concepts of municipal and urban engineering. Since it has been my area of interest from high school and I had done some research on the topic I thought the graduate program would be a breeze. But I was soon proved wrong and found myself struggling from the very first semester. At TheReliableTutor my online civil engineering assignment tutor helped walk me through the different concepts and with in-depth quality research that was missing from my work.
Mindy Wong Student
Marketing was always my area of preference. So I was confident when I got through the MBA program at Duke. But writing all the assignments over the existing work load was proving to be too much for me. The online marketing assignment expert at TheReliableTutor saved my time and effort by conducting all the research and guiding me through the material.
Shane Duncan Student
The online chemical engineering transport phenomenon assignment help experts at HwA are very professional and dedicated to helping us students. Thanks to their efforts I now have a better understanding of the transport phenomenon and also my grades have improved a lot.
Beverly Miller Student
1. Having a background of engineering I was pretty confident that I will have no problems with the assignments and homework that will be required to be submitted in my masters program. However there was increasing pressure of assignment submissions. I was spending too much time and effort on writing the assignments and not really gaining any knowledge. The online mechanical engineering tutors at TheReliableTutor.com helped minimize my research time and allowed me to actually gain knowledge from my course.
Cecilia Chang Student
Comments
this is a very good website
I have 50 questions for the same test your page is showing only 28
hi can you please help or guide me to answer my assignments. thanks
hi can anyone help or guide me to my assignments. thanks
This solution is perfect ...thanks
Hello Allison,I love the 2nd image that you did! I also, had never heard of SumoPaint, is something that I will have to exolpre a bit! I understand completely the 52 (or so) youtube videos that you probably watched. Sometimes they have what you want, sometimes they don't! However, it is always satisfying when you are able to produce something that you have taught yourself. Great job!Debra 0 likes
Perfect bank of solution.
great !
thanks for the quick response. the solution looks good. :)
thnx for the answer. it was perfect. just the way i wanted it.
works fine.