Mabeche Company - Term Paper Example

Mabeche Annual Report al Affiliation: Contents Table of content Contents 2 Chairman’s Letter 3 Directors Board4 Transactions 4 Journal Entries 6 Ledger Accounts 7 Unadjusted Trial Balance 11 Statement of Income 13 Statement of Comprehensive Income (Balance Sheet) 13 Adjusted Trial Balance 14 Reference 18 Chairman’s Letter I am delighted to hand to you our Financial Statements and Annual Report for the year 2013. All through the period under assessment, the Mabeche Company performed exceptionally well. In actual fact, this is the unsurpassed performance ever in the company’s 10 year history as the bank attained a number one spot in provisions of profits, branch network, capitalization and balance sheet dimension in the region. Although with the tricky operating surroundings, particularly throughout the summer of the year 2013 and rising competition in the segment, the Mabeche Group was competent to attain remarkable financial outcomes that reflecting positively on the company’s on-going revolution schemes and strong routine from our entire auxiliary in the region. The revolution plan initiated by the director’s board in the financial year is yielding incredibly fine results for the company’s dealings and transactions. The chief focal point of the plan is to amplify business yield, improve innovational activities, improve quality on clients’ service and raise the company’s market shareholding. The good results were anchored on multiplied market share, robust performance from all regional businesses and therefore the reduction within the company’s cost to financial gain magnitude and attributable to improved efficiencies in our operations. The accountant and the bookkeepers normally set up the annual and monthly financial reports and statements for distribution to the manager in charge of operations. The reports and statements includes: income statement, balance sheet, and expenses budgeted report for every program in the company’s dealings, accounts receivable register, accounts owed register, cash flow projection, and other requested and related reports (Greuning, 2006). Periodic and annual financial reports will be delivered to the Committee of Finance and of Directors Board for review and endorsement. Directors Board The director’s board has the following responsibilities in the preparation of the annual report (Greuning, 2006). 1. Scrutinize and endorse the annual budgetary report 2. Scrutinize periodic and annual financial reports and statements 3. Assessments on Executive Directors routine on annual performance and sets the salary compensations. 4. At least two members of the panel will be chosen by the board to be endorsed signers on the accounts of the bank 5. Scrutinizes and endorses every contracts over $100,000 6. Scrutinizes and endorses all expenditures that are non-budgeted over $100,000 7. Scrutinizes and endorses staff on systems internal controls (ICS) and accounting procedures and policies 8. Resolve whether the company is supposed to be audited and also selects and agrees with the auditor Transactions Mabeche Company was full incorporated on 21st May 2010 with the associated initial value of capital of five thousand shares of stock valuing at $20. Throughout the prime month of its dealings and operations, the company engaged in following dealings: Date (2013) Transaction Jan 2 A value of $36,000 was compensated as advance rent for 3 full months. Feb 3 Compensated $60,000 cash on the acquirement of equipment priced $80,000. The remaining value was documented as a one year note owed with the rate of interest of 9%. March 4 Obtained office materials priced $17,600 on description. April 13 Offered services to its clients and acknowledged $28,500 as cash in hands May 13 compensated the accounts owed on the office materials obtained in the 4th of January 4. June 14 compensated wages to its workers in January for the opening two weeks of the month, amounting to $19,100. July 18 Offered services of $54,100 worth to its clients. They compensated $32,900 and assured to pay out the residual value. August 23 Acknowledged $15,300 from clients for the services offered on 18th January. September 25 Acknowledged $4,000 as an advance imbursement from clients. October 26 Obtained office materials priced $5,200 on description. October 28 Compensated wages to its employees for the third and fourth week of January: $19,100. November 31 Compensated $5,000 as paid-out dividends. December 31 Acknowledged bill of electricity bill as $2,470. December 31 Acknowledged bill of telephone bill of $1,494. December 31 Auxiliary expenses remunerated throughout the month totaled to $3,470 Journal Entries The following entries demonstrate the journal entries for the above events. Date Account Debit Credit Jan 1 Cash received 100,000 Common Stock 100,000 Jan 2 Advance Rent 36,000 Cash paid out 36,000 Jan 3 Equipment obtained 80,000 Cash paid out 60,000 Notes owed 20,000 Jan 4 Office materials 7,600 Accounts billed 17,600 Jan 13 Cash received 28,500 Service proceeds 28,500 Jan 13 Accounts owed 17,600 Cash paid 17,600 Jan 14 Compensated Wages 19,100 Cash 19,100 Jan 18 Cash 32,900 Receivable Accounts 21,200 Service proceeds 54,100 Jan 23 Cash received 15,300 Receivable Accounts 15,300 Jan 25 Cash received 4,000 Revenue Unearned 4,000 Jan 26 Office materials 5,200 Accounts owed 5,200 Jan 28 Compensated Wages 19,100 Cash paid 19,100 Jan 31 Dividends paid 5,000 Cash paid 5,000 Jan 31 Expense on Electricity 2,470 Payable Utilities 2,470 Jan 31 Expense on Telephone 1,494 Utilities Payable 1,494 Jan 31 Assorted Expenses 3,470 Cash paid 3,470 Ledger Accounts The following ledger accounts revealed below are resulting from the journal entries of Mabeche Company. Asset Accounts Cash (In bank and at hand) $100,000 28,500 32,900 15,300 4,000 $36,000 60000 17600 19,100 19,100 5,000 3,470 $20,430 Accounts Receivable $21,200 $15,300 $20,430 Office Materials $17,600 5,200 $36,000 $22,800 Advance Rent $36,000 $36,000 60000 17600 19,100 19,100 5,000 3,470 $36,000 Equipment $80,000 $80,000 Liability accounts Accounts owed $17,600 $17,600 5,200 $5,200 Notes owed $20,000 $20,000 Utilities owed $2,470 1,494 $3,964 Revenue Unearned $4,000 $4,000 Equity Accounts Common Stock $100,000 $100,000 Revenue, Dividend and Expense Accounts ($) Service Revenue 100,000 28,500 32,900 15,300 4,000 28,500 54100 $82,600 Dividend $5,000 $5,000 Expenses on Wages $19,100 19,100 38200 Assorted Expense $3,470 $3,470 Expense on Electricity Expense on Telephone Unadjusted Trial Balance The following illustrates an unadjusted trial balance prepared from the ledger accounts of Mabeche Company. Mabeche Company Unadjusted Trial Balance As of December 31, 2013 Debit Credit Cash 20,430 Accounts Receivable 5,900 Office Materials 22,800 Advance Rent 36,000 Equipment 80,000 Accounts owed $5,200 Notes owed 20,000 Utilities owed 3,964 Revenue Unearned 4,000 Common Stock 100,000 Service proceeds 82,600 Expense on Wages 38,200 Assorted Expense 3,470 Expense on Electricity 2,470 Expense s on Telephone 1,494 Dividends 5,000 Total $215,764 $215,764 Mabeche Company Statement of Income For the Year ended Jan 31, 2013 Sales 85,600 Less: Expenses: Expense on Wages 38,200 Material Expenses 18,480 Expenses on Rent 12,000 Assorted Expense 3,470 Expense on Electricity 2,470 Expense on Telephone 1,494 Expense on Depreciation 1,100 Expenses on Interest 150 Gross Expenses (77,364) Net Income $8,236 Statement of Comprehensive Income (Balance Sheet) The following is an illustration of Statement of Comprehensive Income as prepared under IFRS policies (Greuning, 2006). Mabeche Company Statement of Comprehensive Income (Balance Sheet) As on December January 31, 2013 ASSETS Amount ($) LIABILITIES AND EQUITY Amount ($) Current Assets: Cash (At bank and hand) Receivable Accounts Office materials Advanced Rent Total Current Assets Non-Current Assets: Equipment Accumulated Depreciation Net Non-Current Assets Total Assets 20,430 5,900 4,320 24,000 $54,650 $80,000 −1,100 $78,900 $133,550 Liabilities: Accounts owed Utilities owed Revenue Unearned Interest Payable Notes owed Total Liabilities Common Stock Retained proceeds Total Liabilities and Equity $5,200 3,964 1,000 150 20,000 $30,314 100,000 3,236 $133,550 Adjusted Trial Balance The shown post-closing trial balance was organized after posting the closing entries of Mabeche Company to its general ledger and calculating new balances on accounts. Mabeche Company Adjusted Trial Balance January 31, 2010 Assets Debit Credit Cash Receivable Accounts Office materials Advanced Rent Equipment Accumulated Depreciation Accounts owed Utilities billed Unearned Revenue Interest owed Notes owed Common Stock Retained proceeds Total $20,430 5,900 4,320 24,000 80,000 − − − − − − − − $134,650 − − − − − $1,100 5,200 3,964 1,000 150 20,000 100,000 3,236 $134,650 10 Column Period Worksheet Mabeche Company 10 Column Period Worksheet 10 Column Worksheet Trial balance End of Period Adjustments Adjusted Trial Balance Income statement Balance sheet Account name Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Cash Receivable Accounts Office materials Advanced Rent Equipment Accumulated Depreciation Accounts owed Utilities billed Unearned Revenue Interest owed Notes owed Common Stock 20,430 5,900 4,320 24,000 80,000 − − − − − − − − − − − − $1,100 5,200 3,964 1,000 150 20,000 100,000 Reference Greuning, H. v. (2006). International financial reporting standards a practical guide (4th ed.). Washington, D.C.: World Bank. Read More