Financial Statements Analysis

This assignment requires a detailed analysis of Damian's financial statements. Students need to examine the provided income statement to calculate key metrics like gross profit and net profit. Furthermore, the balance sheet needs to be analyzed to understand the company's assets, liabilities, and equity position. The assignment aims to assess the student's ability to interpret and analyze financial data to draw conclusions about Damian's financial health and performance.

ACCOUNTING

Table of Contents
Journal entries..............................................................................................................................3
General legder accounts...............................................................................................................5
Inventory card of Rock n roll in FIFO.........................................................................................7
Inventory card for Blues drum in FIFO.......................................................................................8
Petty cash Book............................................................................................................................9
Sales Journal................................................................................................................................9
Sales Return Journal..................................................................................................................10
Purchase Journal........................................................................................................................10
Purchase return Journal..............................................................................................................10
Accounts receivable and schedule.............................................................................................11
Accounts payable and schedule.................................................................................................12
Cash payment Journal................................................................................................................14
Cash receipt Journal...................................................................................................................15
Bank reconciliation statements..................................................................................................15
Unadjusted Trial balance...........................................................................................................16
Adjusted Trila balance...............................................................................................................17
Income statements......................................................................................................................18
Balance sheet.............................................................................................................................18
2

Journal entries
Date Particulars Debit Credit
0-101-17 Bank a/c Dr 4000
Motor vehicles a/c Dr 60000
Office supplies a/c Dr 600
To capital 64600
(Being capital brought by damian)
01/01/17 Capital a/c Dr 20000
To financing loan 20000
(Being Loan taken by damian)
01/01/17 Petty cash a/c Dr 400
To bank 400
(Being petty cash fund established)
02/01/17 Insurance 600
To bank 600
(Being insurance paid through
cheque)
02/01/17 Rent a/c Dr 16000
To bank 16000
03/01/17 Purchase a/c Dr
To Tiger King(80*1000 with
credit term of 3/10 nett 60)
80000
To Blues drums(300*600 with
credit term of 5/15 nett 30)
180000
(Being goods purchased on credit)
04/01/17 Foxy drummers(60*1400) 84000
Creative music Ltd(200*900) 180000
To sales
(being rock n roll drum set sold on
credit with invoice no. 4001)
05/01/17 Tiger King Ltd a/c Dr(4*1000) 4000
To Purchase return 4000
(Being rock n roll drum set
purchased from tiger king Ltd
returned)
3

06/01/17 Taxi expense 150
To Petty cash 150
(Being tax expense paid from petty
cash with voucher no. 1001)
07/01/17 Cash a/c Dr 82320
Discount allowed(84000*2%) a/c
Dr
1680
To Foxy drummers 84000
(Being cash received by giving
sales discount)
08/01/17 Music a/c Dr(12*1400) 16800
To sales 16800
(Being rock n roll sold to music)
09/01/17 Tiger king drums a/c (80000-
4000)Dr
76000
To cash 73720
To discount received 2280
(Being cash paid to tiger king in
full)
10/01/17 Sign age a/c Dr 190
To Petty cash 190
(Being sign age paid from petty
cash)
15/01/17 Wages a/c Dr 2000
Electricity a/c Dr 600
To bank 2600
(Being amount of wages and
electricity paid from cheque)
17/01/17 Drummers Feast a/c Dr (4*1400) 5600
To sales 5600
(being rock n roll sold to new
customers)
18/01/17 Sales return a/c Dr(2*1400) 2800
To feast drummers 2800
(Being two rock n roll drum set
return by feast drummers)
4

18/01/17 Drawing a/c Dr 2000
To capital 2000
(Being amount withdrawn by
Damian)
19/01/17 Purchase a/c Dr(24*1020) 24480
To Best drums 24480
(Being 24 rock n roll drum set
purchased from best drum with
credit term of 5/10 nett 30 days)
19/01/17 Motor vehicles a/c Dr 340
To bank 340
(being auto services paid through
cheque)
21/01/17 Taxi expense a/c Dr 150
Sign age a/c Dr 190
To bank 340
(Being amount of petty cash
reimbursed)
21-Jan-17 Petty cash a/c Dr 500
To bank 500
(being 500 added to increase the
petty cash advance)
22/01/17 Wages a/c Dr 2000
Telephone services a/c Dr 480
To bank 2480
(Being amount paid through
cheque)
23/01/17 Cash a/c Dr 1000
To commission 1000
(Being prepaid commission
received for future event)
General Journal
For the year ended 31st January 2017
Date Particular
Debit
($) Credit($)
1st Sep
Cash at bank 4000
5

Motor vehicle 60,000
Motor vehicle finance loan 20,000
Drawings 2,000
Electricity 600
Equipment Running Cost 340
Insurance Equipment 600
Interest 7,200
Office Supplies 600
Rent 16,000
Telephones 480
Wages 4,000
Total
(opening Entries)
Balance Day Adjustment
For the year ended 31st January 2017
Date Details Debit($) Credit($)
31st January Depreciation Equipment 6376.8
Accumulated Depreciation 6376.8
(Depreciation of equipment )
31st January Interest Expenses 7200
Interest Payable 7200
(Accrued interest payable for January 2017 )
31st January Wages expenses 1200
Cash at Bank 1200
(Employees are owned wages)
31st January Stock/ Inventory( Asset) 118560
Stock on hand/ Ending Inventory(exp) 118560
(Record stock on hand at End of Period)
31st January Sales 286400
Stock On hand/ Ending Inventory(Expenses) 118560
Purchase 284480
Purchase Return 4000
Profit and Loss Summary 124480
(Close revenue and operating expenses to profit
and loss summary)
6

Closing Entries
For the year ended 31st January 2017
Date Details Debit($) Credit($)
30th Sep Profit and Loss Summary 278427
Depreciation-Equipment 6376.8
Cost of Sales Rock n roll 104480
Cost of Sales- Blues Gym set 18000
Electricity 600
Equipment Running costs 340
Insurance-Equipment 600
Interest 7200
Office Supplies 200
Rent 16000
Telephones 480
Wages 5200
Sundry (150+190) 340
Bank Services Fees 50
stock Inventory 118560
(Close all other expenses to profit and loss Summary)
30th Sep Profit and Loss Summary 33170
Capital 33170
(Close profit and loss summary to capital)
Capital 2000
Drawing 2000
(close drawing to capital account)
Reversing Entries
For the year ended 31st January 2017
Date Details
Debit
($) Credit($)
31-Jan-17 outstanding wages 1200
wages expenses 1200
(Reversing Entries)
7

31-Jan-17 Interest payable 7200
Interest Expenses 7200
(Reversing Entries)
General ledger accounts
Capital
Date Particulars Debit Credit Balance
1/1/2017 Bank 4000 4000
Motor vehicles 60000 64000
Office supplies 600 64600
Financing loan 20000 44600
18/01/17 Drawing 2000 42600
31/01/17 Balance 42600
Cash at bank a/c
Date Particulars Debit Credit Balance
01/01/17 Capital 4000 4000
01/01/17 Petty cash 400 3600
02/01/17 Insurance 600 3000
02/01/17 Rent 16000 -13000
15/01/17 Wages 2000 -15000
15/01/17 Electricity 600 -15600
19/01/17 Motor vehicles 340 -15940
22/01/17 Wages 2000 -17940
22/01/17 Telephone [phone]
31-1-17 -18420
Motor vehicles
Date Particulars Debit Credit Balance
01/01/17 Capital 60000 60000
19/01/17 Bank 340 60340
31/01/17 Depreciation(60000
*12%)
7200 53140
31/01/17 Closing balance 53140
Office supplies
Date Particulars Debit Credit Balance
01/01/17 Capital 600 600
31/01/17 spend 400 200
31/01/17 Closing balance 200 200
Financing loan
Date Particulars Debit Credit Balance
01-012017 Capital 60000 60000
31/01/17 Interest on
loan(60000*12%)
7200
8

31/01/17 Closing balance 52800
Interest on bank
loan
Date Particulars Debit Credit Balance
31-1-17 Financing loan 7200 7200
Taxi expenses
Date Particulars Debit Credit Balance
06/01/17 Petty cash 150 150
Signage
Date Particulars Debit Credit Balance
10/1/2017 Petty cash 190 190
Wages
Date Particulars Debit Credit Balance
15-1-17 Bank 2000 2000
22-1-17 Bank 2000 4000
22-1-17 Accrued wages 1200 5200
31-1-17 Closing balance 5200
Electricity
Date Particulars Debit Credit Balance
15-1-17 Bank 600 600
Telephone
expenses
Date Particulars Debit Credit Balance
22-1-17 Bank 480 480
Commision
Date Particulars Debit Credit Balance
23-1-17 Cash 1000 1000
Bad Debt
allowance
Date Particulars Debit Credit Balance
31-1-17 Accounts receivable
Drawing
Date Particulars Debit Credit Balance
18-1-17 Bank 2000 2000
Inventory card of Rock n roll in FIFO
FIFO
9

Rock n
Roll drum
set
Purchases Sales Balance
Date Units Cost Total Units Cost Total Units Cost
3-January-
17
80 $1,000 $80,000 80 $1,000
4-January-
17
60 $1,400 $84,000 20 $1,400
8-January-
17
12 $1,400 $16,800 8 $1,400
17-January-
17
4 $1,400 $5,600 4 $1,400
19-January-
17
24 $1,020 $24,480 28 $1,020
Totals 104 76 $106,400 28
Units
available
for sale
104
Units sold 76
Closing
inventory
28
Cost of
sales
Particulars Units Unit price Total
3-January-
17(Purchas
e)
80 1000 80000
10

19-January-
17(Purchas
e)
24 1020 24480
104480
Closing
inventory
28 1020 28560
Inventory card for Blues drum in FIFO
FIFO
Blues
Gym Set
Purchase
s
Sales Balance
Date Units Cost Total Units Cost Total Units Cost To
3-January-17 300 $60 $18,000 300 $60 $18
4-January-17 200 $900 $180,000 100 $900 $90
Totals 300 200 $180,000 100 $90
Cost of sales
Particulars Units Cost price Total
3-Jan-17 300 60 18000
18000
Inventory at year
end
100 900 90000
11

Petty cash Book
Amount
received
Date Particula
rs
V.No Total Travellin
g
expenses
Stationer
y
expenses
400 2017 Cash
received
6-Jan-17 Taxi
expense
1001 150 150
10-Jan-17 Signage 190 190
500 21-Jan-17 Cash
received
340 150 190
Balance
c/d
560
900
560 22-Jan-17 Balance
b/d
340 cash
received
Sales Journal
Sales Journal
Date Invoice
No.
Account
Debited
Terms Accounts
Receivable (DR)
Sales
(CR)
4-Jan 4001 Foxy
drummers
2/10
30nett
84,000.00 84,000.00
4-Jan 4001 Creative
music Ltd
2/10
30nett
180,000.00 180,000.0
0
8-Jan-17 Music is
Us
$16,800.00 $16,800.0
0
17-Jan-17 Drummer
s feast
2/10
30nett
5600 5600
31-Jan-17 Closing
balance
286400 286400
Sales Return Journal
Sales Returns
Date Particulars Credit Debit Credit Balance
12

2017 Note
January 18 Feast drummers 9001 2800 2800
Purchase Journal
Purchases
Journal
Date Account
Credited
Invoice
No.
Invoice Date Terms Accounts
Payable (CR)
Purchases
(DR)
3-Jan-17 Tiger
king
Drums
7595 3-Jan-17 3/10
nett 60
80,000.00 80,000.
00
3-Jan-17 Best
drums
8490 3-Jan-17 5/15
nett 30
180,000.00 180,00
0.00
19-Jan-17 Best
drum
Ltd
30020 3-Jan-17 5/10
nett 30
24,480.00 24,480.
00
31-Jan-17 Closing 284,480.00 284,48
0.00
Purchase return Journal
Purchase
Returns
Date Particula
rs
Debit Debit Credit Balance
2017 Note
January 5 Tiger
King
6789 4000 4000
Accounts receivable and schedule
Foxy
drummers
13

Date Particulars Post Debit Credit Balance
2017 Ref.
Jan. 4 sales 4001 84000 $84,000.00
7 Cash 2501 82320 $1,680.00
7 Discount
allowed
1680 0
31 Closing balance 0
Music is us
Date Particulars Post Debit Credit Balance
2017 Ref.
Jan. 8 sales 16800 $16,800.00
31 Closing balance $16,800.00
Drummer feast
Date Particulars Post Debit Credit Balance
2017 Ref.
Jan. 17 sales 5600 $5,600.00
18 sales return 2800 $2,800.00
31 Closing balance $2,800.00
Creative music
Date Particulars Post Debit Credit Balance
20x2 Ref.
Jan. 4 Sales 4001 180000 $180,000.00
31 Closing balance $180,000.00
Schedule Of
Accounts Receivable
14

31-Jan-17
Account No. Account Title Balance
4001 Foxy Drummers $-
Music is us $16,800.00
Drummers Feast $2,800.00
Creative music $180,000.00
Accounts receivable $199,600.00
Accounts payable and schedule
Tiger
King
Date Particul
ars
Post Debit Credit Balance
20x2 Ref.
Jan. 3 Purchas
e
7595 80000 $80,000
5 Purchase
return
4000 84000
9 Cash 73720 10280
9 Discount
received
2280 8000
31 closing
balance
8000
Blues Drum set
Date Particul
ars
Post Debit Credit Balance
20x2 Ref.
Jan. 3 Purchas
e
8490 180000 $180,000
31 closing
balance
180000
Best Drums set
Date Particul
ars
Post Debit Credit Balance
20x2 Ref.
Jan. 19 Purchase 30020 24480 $24,480
31 closing
balance
24480
Schedule Of
Accounts
15

Payable
31-Jan-17
Account No. Account Title Balance
7595 Tiger King drums
Ltd
8000
8490 Blues drum 180000
30020 Best Drum set 24480
Accounts payable 212480
Cash payment Journal
Cash
Payments
Date Account
Debit
Explanati
on
Cheque
No.
Post
Ref.
General
Ledger (DR)
Accounts
payable
(DR)
Cash
(CR)
Discounts
Earned
(CR)
1-Jan-17 Petty cash 1001 $400.00 $400.00
2-Jan-17 Insurance $600.00 $600.00
2-Jan-17 Rent $16,000.00 $16,000.0
0
9-Jan-17 Tiger
King
Drums
$76,000.0
0
$73,720.0
0
$2,280.00
15-Jan-17 Wages $2,000.00 $2,000.00
15-Jan-17 Electricity $600.00 $600.00
19-Jan-17 Motor
vehicles
Auto
smart
services
$340.00 $340.00
21-Jan-17 Taxi
expense
Expenses $150.00 $150.00
21-Jan-17 Signage expenses $190.00 $190.00
21-Jan-17 Petty cash Advance $500.00 $500.00
22-Jan-17 Wages $2,000.00 $2,000.00
22-Jan-17 Telephone
expenses
$480.00 $480.00
$23,260.00 $76,000.0
0
$96,980.0
0
$2,280.00
31-Jan-17 Closing
balance
$99,260.00 $99,260.0
0
Cash receipt Journal
Cash Receipt Journal
16

For the month of January 2017
Debit($) Credit($
Date Account
Receipt
No. Debit($)
Disc. Allowed
($) Sales($)
January
7
Received payment from Real Deal
Ltd. 2501 82,320 1,680
Total 82,320 1,680 -
Bank reconciliation statements
Opening Balances
Calculated Bank Statement Balance 4,000.00
Outstanding Items:
Withdrawals
Deposits
Cashbook Balance 4,000.00
Current Month Transactions
Withdrawals 24,490.00
Deposits 85120
Closing Balances
Cashbook Balance (18,420.00)
Outstanding Items:
Withdrawals (24,490.00)
Deposits 85,120.00
Calculated Bank Statement Balance 42,210.00
Actual Bank Statement Balance (38,210.00)
Unadjusted Trial balance
Trial Balance
Particulars Debit Credit
Capital 42600
Cash -18420
Petty cash 560
17

Motor vehicle 53140
Office supplies 200
Rent 16000
Insurance 600
Accounts payable 212480
Purchase 284480
Purchase Return 4000
Wages 5200
Electricity 600
Accounts receivable 199600
Sales 286400
Sales return 2800
Telephone 480
Commission 1000
Drawing 2000
Financing loan 52800
Interest on loan 7200
Discount allowed 1680
Discount received 2280
Miscellaneous provision 59840
608760 608760
Adjusted and post Trial balance
Trial
Balanc
e
Adjustment
s
Adjuste
d trial
balance
Particulars Debit Credit Debit Credi
t
Debit Credit
Capital 42600 42600
18

Cash -18420 -18420
Petty cash 560 560
Motor
vehicle
53140 6376.8 46763.2
Office
supplies
200 200
Rent 16000 16000
Insurance 600 600
Accounts
payable
212480 212480
Purchase 284480 284480
Purchase
Return
4000 4000
Wages 4000 1200 5200
Electricity 600 600
Accounts
receivable
199600 1996 197604
Sales 286400 286400
Sales return 2800 2800 2800
Telephone [phone]
Commission 1000
Drawing 2000 2000
Financing
loan
52800
Interest on
loan
7200
Discount
allowed
1680 1680
Discount
received
2280
Miscellaneou
s provision
59840 59840
Closing stock 125000 125000
Miscellaneou
s income
0
Total 607560 608760 726447.2 726447.2
Income statements
Damian
19

INCOME STATEMENT
FOR THE PERIOD 31st January 2017
$ $ $
REVENUE
SALES
286,40
0
COST OF SALES
PURCHASES
284,48
0
LESS: PURCHASES RETURNS 4,000
NET PURCHASES
280,48
0
GOODS AVAILABLE FOR SALE
280,48
0
LESS: STOCK ON HAND/ENDING INVENTORY
118,56
0
COST OF SALES 161,920
COST OF SALES AT BEGINNING 1ST SEPTEMBER
2015 122,480
GROSS PROFIT 2,000
EXPENSES
SELLING EXPENSES
DEPRECIATION - EQUIPMENT 6,377
DISCOUNT EXPENSE 1,680
EQUIPMENT RUNNING COSTS 340
INSURANCE - EQUIPMENT 600
WAGES 5,200
14,197
ADMINISTRATIVE EXPENSES
ELECTRICITY 600
OFFICE SUPPLIES 200
RENT 16,000
TELEPHONE 340
SUNDRY 340
17,480
FINANCIAL EXPENSES
INTEREST 7,200
20

BANK FEES 50
3,030
TOTAL EXPENSES 27,710
NET PROFIT BEFORE INCOME TAX
(25,710
)
Balance sheet
Damian
BALANCE SHEET
AS on 31st January 2017
$ $ $
ASSETS
CURRENT ASSETS
CASH AT BANK 4,000
PETTY CASH 560
STOCK / INVENTORY 118,560
ACCOUNTS RECEIVABLE 199,600
TOTAL CURRENT ASSETS 322,720
NON CURRENT ASSETS
EQUIPMENT (AT COST) 53,140
LESS: ACCUMULATED DEPRECIATION 6,377
TOTAL NON-CURRENT ASSETS 46,763
TOTAL ASSETS 369,483
LIABILITIES
CURRENT LIABILITIES
ACCOUNTS PAYABLE 212,480
OUTSTANDING WAGES 1,200
INTEREST PAYABLE 7,200
TOTAL CURRENT LIABILITIES 220,880
NON CURRENT LIABILITIES
BANK LOAN 20,000
TOTAL NON-CURRENT LIABILITIES 240,880
21

TOTAL LIABILITES 461,760
NET ASSETS (92,277)
EQUITY
CAPITAL 42,600
Less: DRAWINGS 2,000
Add: Profit (25,710)
TOTAL EQUITY 18,890
22