Financial Statements Preparation - Speech or Presentation Example

Financial ments Preparation al Affiliation) Problem One: a) The T Accounts are in the attached excel spreadsheet. b) The Trial Balance for 4/30/12: Dr. Cr. Cash 44450 Capital contribution 40000 Prepaid Expenses 2000 Inventory 1600 Accounts payable 5400 Supplies 1000 Note Payable 11000 Equipment 11000 Advertisements 600 Accounts Receivable 50 Cost of Goods 4400 Sales 11000 Wage Expense 2000 Repair Expense 300 Total $67400 $67400 Income Statement for the period ended 4/30/12 Sales 11000 Cost of Goods 4400 Gross profit 6600 Wage expense 2000 Repair expense 300 Advertisements 600 Prepaid expenses 2000 Supplies 1000 Net profit $700 Statements of Changes in equity for the period ending 30th April 2012 $ Balance at the beginning of the year 0 Capital Contributed during the year 40000 Profit for the year 700 Balance at the end of the year 47000 Statement of Financial Position as at 4/ 30/ 12 $ Current assets: Cash 44450 Inventory 1600 Receivables 50 Non-Current assets: Equipment 11000 Total Assets 57100 Current Liabilities: Payables 5400 Non-current Liabilities: Loan Notes 1100 Equity: Share Capital 40000 Retained Earnings 700 Total Equity and Liabilities 57100 c) Memo to Audrey The operations have been very successful for the first month of business.

Companies normally make loses during the first period in business due to the startup costs related in the line business. The business made a profit of $700 despite all these factors that face small start-ups such as the one Audrey owns. The shareholder capital has increased due to the retained earnings gained. This implies that the company has increased the wealth of the shareholder. The company has a high liquidity position since its current assets exceed its current liabilities by a large margin implying that the company can easily offset its current debts.