Financial Statement Analysis and Interpretation

This assignment involves the analysis and interpretation of a company's financial statements, specifically an income statement and balance sheet. The student is required to prepare adjusting entries, calculate net income or loss, and provide a balancing figure for the given trial balance. The solution involves identifying non-current assets, calculating depreciation and expenses, and analyzing wages, insurance, utilities, and supplies expenses. The assignment also includes a references section with links to relevant resources.

Running Head: Accounting system and process
1
Project Report: Accounting system and process

Accounting system and process 2
Que 1)
Plagiarism and its collusion:
Plagiarism is a sort of activity which is done to steal and use someone’s work and
declare that work as their individual work. Thus, one might say that plagiarism is an
exploitative work. It contains two exercises. To start with, take another person's work and
afterward pass it off as own work. Colleges punish such sort of work. They force high
punishment on such activities (plagiarism.org, 2017).
The study explains that plagiarism is an awful thing for honest students as they write
and complete their work by themselves and dishonest student complete their work with the
help of various websites which are offering the academic writing work. It leads dishonest
student to higher marks than honest students.
.
Que 2)
Pasting spreadsheets in doc files:
A special technique is required to paste the spreadsheet in doc file along with the raw
and column headings:
Screenshot:
It is the easiest technique. In this process, user just has to take a screenshot and paste
it in doc file.

Accounting system and process 3
Formulas:
For pasting the spreadsheet in doc file in formula view, user have to take the help of
(ctrl+~). Firstly, click the (Ctrl +~) and then go to page layout option and enable the option of
print box in heading menu. Later, copy and paste the table into the doc file and afterwards, a
menu box would pop up at end of the table. Lastly, click on the menu box and chose the
option “paste as picture”.
3
4
5
6
7
8
9
B C
Current assets 20000
Current liabilities 10000
Current ratio =C3/C4
Total debt 15000
Total assets 25000
Debt ratio =C7/C8
Figure 1: Formula view
Que 3)
Accounting resources on the internet:
Website Comment URL
AICPA AICPA assists the
accounting
professionals to
http://www.aicpa.org

Accounting system and process 4
manage and enhance
the accounting
techniques and
accounting ethics
knowledge.
FASB FASB makes it easy for
the private organization
to prepare the financial
statements.
http://www.fasb.org/home
Accounting info Accounting info offers
the study material to
the accounting
professional students.
http://accountinginfo.com/study/
je/je-01.htm
Gradestack.com Gradestack is also
relevant for the
accounting professional
student to find out the
study material and
understand each
equation of accounting.
http://gradestack.com/Class-11th-
Commerce/Financial-Statements-/
Provision-for-Doubtful/17612-3454-
30328-study-wtw
Que 4)
Professional Accounting Bodies:
There are various accounting bodies in Australia. IPA (institute of public accountant)
is one of them. It is one of the most used professional bodies in Australia. This accounting
body assists the accounting and auditing professionals in enhancing their knowledge and it
improves the overall development. Accounting professional study material is available at this
website that helps the students to enhance their knowledge (IPA, 2017).

Accounting system and process 5
This website offers the various study material and practice manuals to the accounting
professional students such as law modules, costing modules, accounting and auditing
modules etc.
Que 5)
Work integrated Assessment:
Computing environment must be enough updates and should be comfortable for
employees of an organization to work productively and with successfully. Computing
environment is an inclusion of numerous equipment, programming and different assets. This
inclusion helps the organization in achieving the goals and the objectives. Hardware
incorporates CPU, monitor, mouse, keyboard, modem, scanner, data cable, printer and so on.
Though, Software incorporates Database system, Spreadsheets, doc records and control point.
Software should be updated in an association to help the workers at its fullest and
influence the task to ease. An updated software helps the workers to done the given task at
the earliest opportunity (Science daily, 2017). Operating system of an organization should
likewise be as indicated by the work so it turns out to be very simple for the workers of the
organization and other individuals at working environment to done the undertaking.
Power point software assists the workers toward exhibit data in an expert way. Doc
documents help to records and keep up the data of the organization. Data base management is
useful to keep a track over the business exercises and keep up every one of the exercises.
Spreadsheet is useful to set up the financial transactions and break down the circumstance of
organization.
On the other hand hardware is also essential for a business. Without the assistance of
equipment and hardwires, it is not possible for the user to run the software. Hardware is
helpful to give the command to the PC and get back the information. Hardware should be in a
flawless state with the goal that workers could do work viably. CPU is the principle
equipment (Nobes and Parker, 2008). It offers command to the software to achieve the
assignment. Further, for transferring the file, data cable is useful. Modem interfaces the
network to the PC. Printer and scanner help to encode and interpret the data from PC.
In this way it could said that the computing environment of an association must be up
to dated with the goal that the work could be ease for the employees.
Que 6)

Accounting system and process 6
ABC Learning Case study
Refer to other file.
Que 7)
a) PALER:
PALER stands for payment, assets, liabilities, owner’s equity and the revenues of an
organization.
b) excel solution:
S. No. Account Title Type of Account
1 Loan Payable Liability
2 Rent Expense Expense
3 Cash Asset
4 Office Supplies Asset
5 Salary Expense Expense
6 Salary Payable Liability
7 Property Tax Expense Expense
8 Prepaid Expenses Asset
9 Office Furniture Asset
10
Electricity and Gas
Expense Expense
11 Accounts Payable Liability
12 Davis, Capital Proprietorship
13 Service Revenue Revenue
14 Accounts Receivable Asset
15 Supplier Expense Expense
16 Investments Asset

Accounting system and process 7
Que 8)
Balance Sheet equation
a) Manual solution

Accounting system and process 8

Accounting system and process 9

Accounting system and process 10
b) Spreadsheet required:
Report Section: Balance Sheet Equation Comments
Case-1 Case-2 Case-3
Revenue 160 K 210 400
K= Net
income +
expenses

Accounting system and process 11
Expenses 110 160 300
Dividend declared 0 4 Q 50
Q=
Beginning
retained
earnings +
net income
- ending
retained
earnigs
Additional
Investment by
stockholders 0 35 40
Net income E 50 50 P 100
E and P=
Revenues -
expense
Retained earning 0
Beginning of year 50 60 100
End of year D 100 J 106 150
D and J=
Retained
earning
beginning
+ net
income -
dividend
declared
Paid-in Capital
Beginning of year 15 20 N 50
N= Total
assets
beginning -
retained
earnings
beginning
End of year C 15 H 55 90
C and H=
Total
assets
ending less
liabilities
ending less
retained
earnings
ending
Total assets

Accounting system and process 12
Beginning of year 70 F 160 L 270
F and L=
Paid in
capital
beginning
+ retained
earning
beginnng +
liabilities
beginning
End of year 140 300 M 320
M= Paid in
capital
ending +
retained
ending +
liabilities
ending
Total liabilities
Beginning of year A 5 80 120
A= Total
assets
beginning -
paid in
capital
beginning -
retained
earnings
beginning
End of year B 25 G 139 80
B and G=
Total
assets -
paid in
capital -
retained
earnings

Accounting system and process 13
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
B C D E F G H I
Comments
Case-1 Case-2 Case-3
Revenue =D6 K =F31+F28 =H6
K= Net income +
expenses
Expenses =D7 =F7 =H7
Dividend declared =D8 =F8 Q =H33+H31-H34
Q= Beginning retained
earnings + net income -
ending retained earnigs
Additional Investment by
stockholders =D9 =F9 =H9
Net income E =D27-D28 =F10 P =H27-H28
E and P= Revenues -
expense
Retained earning =D11
Beginning of year =D12 =F12 =H12
End of year D =D33+D31-D29 J =F33+F31-F29 =H13
D and J= Retained
earning beginning + net
income - dividend
declared
Paid-in Capital
Beginning of year =D15 =F15 N =H37-H30
N= Total assets
beginning - retained
earnings beginning
End of year C =D36+D30 H =F36+F30 =H16
C and H= Total assets
ending less liabilities
ending less retained
earnings ending
Total assets
Beginning of year =D18 F =F42+F36+F33 L =H36+H42+H33
F and L= Paid in capital
beginning + retained
earning beginnng +
liabilities beginning
End of year =D19 =F19 M =H37+H43+H34
M= Paid in capital
ending + retained ending
+ liabilities ending
Total liabilities
Beginning of year A =D39-(D33+D36) =F21 =H21
A= Total assets
beginning - paid in
capital beginning -
retained earnings
beginning
End of year B =D40-(D34+D37) G =F40-(F37+F34) =H22
B and G= Total assets -
paid in capital -retained
earnings
Report Section: Balance Sheet Equation

Accounting system and process 14
Que 9)
Debit and Credit Balances:
Debit Balances Credit Balances
Fixed Assets Capital
Wages Bills Payable
Purchase Account Sales account
Bad Debts Account Unearned Revenue
(Myaccountingcourse, 2018)

Accounting system and process 15
Que 10)
Trial Balance:
Manual Solution

Accounting system and process 16
a) Normal view
Report
Trial
balance
Adjustm
ents
Adjustmented
Trial balance
Income
statement
Balance
Sheet

Accounting system and process 17
Deb
it
Cre
dit
De
bit
Cr
edi
t Debit Credit
Deb
it
Cre
dit
Deb
it
Cre
dit
Cash
124
50
29
00 15350
153
50
Accounts receivable
176
50 17650
176
50
Inventory
569
80
21
02
0 78000
780
00
Supplies
756
0
75
60
Buildings
145
000
14500
0
145
000
Accumulatde
depreciation,
building
176
00
40
00 21600
216
00
Furniture
237
80 23780
237
80
Accumulated dep,
furniture
576
0
37
00 9460
946
0
Accounts payable
174
00 17400
174
00
Salary payable
23
00 2300
230
0
Interest payable
14
00 1400
140
0
Unearned sales
revenue
765
0 7650
765
0
Note payable, long
terms
340
00 34000
340
00
Capital
142
675
14267
5
142
675
Drawings
459
0 4590
459
0
Sales revenue
166
000
29
00
16890
0
168
900
Sales discount
345
0 3450
345
0
Sales returns and
allownces
343
0 3430
343
0
Purchase
897
00
21
02
0 68680
686
80
Purchase discount
401
5 4015
401
5
Purchase return and
allownces
769
0 7690
769
0
Selling expenses 237 23700 237

Accounting system and process 18
00 00
Supplies
expenses
50
40 5040
504
0
Depreciation on
building
20
00 2000
200
0
Depreciation on
furniture
18
50 1850
185
0
Salaries expenses
37
00 3700
370
0
General expenses
145
00 14500
145
00
Supplies
expenses
25
20 2520
252
0
Depreciation on
building
20
00 2000
200
0
Depreciation on
furniture
18
50 1850
185
0
Interest expenses
Suspense
Total
402
790
402
790
42
88
0
42
88
0
41709
0
41709
0
132
720
180
605
284
370
236
485
Net income/ loss
478
85
478
85
Balnacing
402
790
402
790
42
88
0
42
88
0
41709
0
41709
0
180
605
180
605
284
370
284
370

Accounting system and process 19
Formula view
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
B C D E F G H I J K L
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash 12450 2900 15350 15350
Accounts receivable 17650 17650 17650
Inventory 56980 21020 78000 78000
Supplies 7560 7560
Buildings 145000 145000 145000
Accumulatde depreciation, building17600 4000 21600 21600
Furniture 23780 23780 23780
Accumulated dep, furniture 5760 3700 9460 9460
Accounts payable 17400 17400 17400
Salary payable 2300 2300 2300
Interest payable 1400 1400 1400
Unearned sales revenue 7650 7650 7650
Note payable, long terms 34000 34000 34000
Capital 142675 142675 142675
Drawings 4590 4590 4590
Sales revenue 166000 2900 168900 168900
Sales discount 3450 3450 3450
Sales returns and allownces3430 3430 3430
Purchase 89700 21020 68680 68680
Purchase discount 4015 4015 4015
Purchase return and allownces 7690 7690 7690
Selling expenses 23700 23700 23700
Supplies expenses 5040 5040 5040
Depreciation on building 2000 2000 2000
Depreciation on furniture 1850 1850 1850
Salaries expenses 3700 3700 3700
General expenses 14500 14500 14500
Supplies expenses 2520 2520 2520
Depreciation on building 2000 2000 2000
Depreciation on furniture 1850 1850 1850
Interest expenses
Suspense
Total 402790 402790 42880 42880 417090 417090 132720 180605 284370 236485
Net income/ loss 47885 47885
Balnacing 402790 402790 42880 42880 417090 417090 180605 180605 284370 284370
Trial balance
Report
Adjustments Adjustmented Trial balanceIncome statement Balance Sheet
Changes:
Report
Trial
balance
Adjustm
ents
Adjustmented
Trial balance
Income
statement
Balance
Sheet
Deb
it
Cre
dit
De
bit
Cr
edi
t Debit Credit
Deb
it
Cre
dit
Deb
it
Cre
dit
Cash
945
0
29
00 12350
123
50
Accounts receivable
176
50 17650
176
50
Inventory 569
80
21
02
78000 780
00

Accounting system and process 20
0
Supplies
756
0
75
60
Buildings
145
000
14500
0
145
000
Accumulatde
depreciation,
building
181
00
40
00 22100
221
00
Furniture
242
80 24280
242
80
Accumulated dep,
furniture
576
0
37
00 9460
946
0
Accounts payable
174
00 17400
174
00
Salary payable
23
00 2300
230
0
Interest payable
14
00 1400
140
0
Unearned sales
revenue
765
0 7650
765
0
Note payable, long
terms
340
00 34000
340
00
Capital
142
675
14267
5
142
675
Drawings
459
0 4590
459
0
Sales revenue
163
000
29
00
16590
0
165
900
Sales discount
345
0 3450
345
0
Sales returns and
allownces
343
0 3430
343
0
Purchase
897
00
21
02
0 68680
686
80
Purchase discount
401
5 4015
401
5
Purchase return and
allownces
769
0 7690
769
0
Selling expenses
237
00 23700
237
00
Supplies
expenses
50
40 5040
504
0
Depreciation on
building
20
00 2000
200
0
Depreciation on
furniture
18
50 1850
185
0
Salaries expenses
37
00 3700
370
0

Accounting system and process 21
General expenses
145
00 14500
145
00
Supplies
expenses
25
20 2520
252
0
Depreciation on
building
20
00 2000
200
0
Depreciation on
furniture
18
50 1850
185
0
Interest expenses
Suspense
Total
400
290
400
290
42
88
0
42
88
0
41459
0
41459
0
132
720
177
605
281
870
236
985
Net income/ loss
448
85
448
85
Balnacing
400
290
400
290
42
88
0
42
88
0
41459
0
41459
0
177
605
177
605
281
870
281
870
Que 11)
Crossword:
1
.
4
.

Accounting system and process 22
3
.
2
.
5
.
Questions:
1. An accounting idea which states that entire business entities must be accounted for
individually. Two words: ********_******_Concept
2. The accounting quality information which addresses the financial information
usability.
3. The accounting principle which states that the providing cost of financial information
in the financial statements should not outweigh the assistance of that knowledge to the
users. Two Words: ****_*******_Principle
4. Whether financial information could be established and used every time by investors
ad creditors with the same results.
5. Amount
Solution:
1.B
Crossword U
S
4R E L I A B I L I T Y
N
E

Accounting system and process 23
S
S
E
3.C O S T B E N I F I T
T
2.
C O M P A R A B I L I T Y
T
5.
M O N E Y
(Accounting course, 2017)
Que 12)
Adjusting Entries:
Accrued expenses Expenses a/c Dr
Accrued Expenses Cr
Accrued Revenue Accrued Revenue Dr
Revenue a/c Cr
Unearned Revenue Revenue A/c Dr
Unearned revenue Cr
Prepaid Expenses Prepaid expenses a/c Dr
Expenses a/c Cr
(My accounting course, 2017)

Accounting system and process 24
Que 13)
Current and non-current assets
Current assets are those assets that are recorded to in the balance sheet and these assets
are expected to be form into cash within a year. On the other hand, noncurrent assets are
those assets which are recorded in the balance sheet but could not form into cash in a year
(Accounting explained, 2017).
Que 14)
Ratios:
Current ratio could be measured on the basis of current liabilities and current assets to
evaluate the liquid phase of the corporation while debt ratio could be measured on the basis
of total debt and assets to evaluate the leverage state of the corporation.
Current assets 5,000.00
Current
liabilities 3,000.00
Current ratio 1.67
Total debt 10,000.00
Total assets 25,000.00
Debt ratio 0.40
The above calculation explains that the current ratio of the company is quite better
and the debt ratio of the case explains that the capital structure of the company is also good.

Accounting system and process 25
Que 15)
Worksheet and financial reports:
Manual solution:
a) Normal view:

Accounting system and process 26
Report Section
Slicity Motors worksheet, period ended 30th June 2017
Unadjusted
trial
Adjustment
s
Adjusted
trial
Balance
sheet
Income
statement
Debit
Credi
t
Debi
t
Credi
t Debit
Credi
t Debit
Credi
t
Debi
t
Cred
it
Cash
5,46,3
70
5,46,3
70
5,46,
370 -
Accounts
receivables
1,48,0
00
1,48,0
00
1,48,
000 -
Supplies
36,50
0
36,05
0 450 450 -
Prepaid
insurance 4,560 780 3,780 3,780 -
Accrued
revenue 800 800 800 -
Equipment
5,67,0
00
1,29
0
5,68,2
90
5,68,
290 -
Accumulat
ed
depreciatio
n -
1,07,
890 1,290
1,09,
180 -
1,09,
180
Accounts
payable -
2,34,
980
2,34,
980 -
2,34,
980
Wages
payable -
16,78
9 600
17,38
9 -
17,38
9
Unearned
service
revenue -
22,34
5
6,75
4
15,59
1 -
15,59
1
Capital -
4,56,
340
4,56,
340 -
4,56,
340
Drawings
34,23
1 -
34,23
1
34,23
1 -
Service
revenue -
7,67,
307 7,554
7,74,
861
7,74,
861
Depreciatio
n and
expenses - - - - -
Wages
expenses 2,56,4 - 600 2,57,0 2,57, -

Accounting system and process 27
30 30 030
Insurance
expenses - - 780 780 780 -
Utilities
expenses
12,56
0 -
12,56
0
12,5
60 -
Supplies
expenses -
36,0
50
36,05
0
36,0
50 -
Total
16,05,
651
16,05
,651
46,2
74
46,27
4
16,08,
341
16,08
,341
13,01
,921
8,33,
480
3,06,
420
7,74,
861
Net
income/los
s
4,68,
441
4,68,
441
Balancing
13,01
,921
13,01
,921
7,74,
861
7,74,
861
Formula View:
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash =C6 =C29+E29-F29 =G29 =H29
Accounts receivables =C7 =C30+E30-F30 =G30 =H30
Supplies =C8 =C31-450 =C31+E31-F31 =G31 =H31
Prepaid insurance =C9 =G11 =C32+E32-F32 =G32 =H32
Accrued revenue =G13 =C33+E33-F33 =G33 =H33
Equipment =C10 =F35 =C34+E34-F34 =G34 =H34
Accumulated depreciation =C11 =D11 =G8 =D35+F35-E35 =G35 =H35
Accounts payable =C12 =D12 =D36+F36-E36 =G36 =H36
Wages payable =C13 =D13 =G9 =D37+F37-E37 =G37 =H37
Unearned service revenue =C14 =D14 =G12 =D38+F38-E38 =G38 =H38
Capital =C15 =D15 =D39+F39-E39 =G39 =H39
Drawings =C16 =D16 =C40+E40-F40 =G40 =H40
Service revenue =C17 =D17 =E38+E33 =D41+F41-E41 =H41
Depreciation and expenses =C18 =D18 =C42+E42-F42 =G42 =H42
Wages expenses =C19 =D19 =F37 =C43+E43-F43 =G43 =H43
Insurance expenses =C20 =D20 =F32 =C44+E44-F44 =G44 =H44
Utilities expenses =C21 =D21 =C45+E45-F45 =G45 =H45
Supplies expenses =D22 =F31 =C46+E46-F46 =G46 =H46
Total =SUM(C29:C46) =SUM(D29:D46) =SUM(E29:E46) =SUM(F29:F46) =SUM(G29:G46) =SUM(H29:H46) =SUM(I29:I46) =SUM(J29:J46) =SUM(K29:K46) =SUM(L29:L46)
Net income/loss =L47-K47
=I47-J47
Balancing =I47+I49 =J47+J49 =K47+K48 =L47
Report Section
Slicity Motors worksheet, period ended 30th June 2017
Unadjusted trial Adjustments Adjusted trial Balance sheet Income statement
Changes:
Report Section: four Changes
Slicity Motors worksheet, period ended 30th June 2017
Unadjusted
trial
Adjustment
s
Adjusted
trial
Balance
sheet
Income
statement
Debit
Credi
t
Debi
t
Credi
t Debit
Credi
t Debit
Credi
t
Debi
t
Cred
it
Cash
5,46,3 5,46,3 5,46, -

Accounting system and process 28
70 70 370
Accounts
receivables
1,48,0
00
1,48,0
00
1,48,
000 -
Supplies
36,50
0
36,05
0 450 450 -
Prepaid
insurance 4,560 780 3,780 3,780 -
Accrued
revenue 800 800 800 -
Equipment
5,67,0
00.00
129
0
5,98,2
90.00
5,98,
290.0
0 0
Accumulat
ed
depreciatio
n -
1,07,
890.0
0 1290
1,09,
180.0
0 -
1091
80
Accounts
payable -
2,34,
980.0
0
2,34,
980.0
0 -
2349
80
Wages
payable -
21,78
9.00 600
22,38
9.00 -
2238
9
Unearned
service
revenue -
22,34
5.00
675
4
15,59
1.00 -
1559
1
Capital -
4,56,
340.0
0
4,86,
340.0
0 -
4863
40
Drawings
39,23
1.00 -
39,23
1.00
39,23
1.00 0
Service
revenue -
7,67,
307.0
0 7554
7,74,
861.0
0
7,74,
861
Depreciatio
n and
expenses - - - - -
Wages
expenses
2,56,4
30.00 - 600
2,57,0
30.00
2,57,
030 -
Insurance
expenses - - 780
780.0
0 780 -

Accounting system and process 29
Utilities
expenses
12,56
0 -
12,56
0
12,5
60 -
Supplies
expenses -
36,0
50
36,05
0
36,0
50 -
Total
16,10,
651
16,10
,651
46,2
74
46,27
4
16,43,
341
16,43
,341
13,36
,921
8,68,
480
3,06,
420
7,74,
861
Net
income/los
s
4,68,
441
4,68,
441
Balancing
13,36
,921
13,36
,921

Accounting system and process 30
References:
Accounting Course. 2018. Crossword. Retrieved March 26, 2018, from
http://www.myaccountingcourse.com/accounting-principles/crossword-puzzles
Accountingexplained. 2018. Non-current assets. Retrieved March 26, 2018, from
http://accountingexplained.com/financial/non-current-assets/
CPA. 2018. ABC Learning collapse case study. Retrieved March 26, 2018, from
https://www.cpaaustralia.com.au/professional-resources/education/abc-learning-
collapse-case-study
CPA. 2018. Toolkit. Retrieved March 26, 2018, from
https://www.cpaaustralia.com.au/professional-resources/financial-planning/toolkit
IPA. 2018. Home. Retrieved March 26, 2018, from https://www.publicaccountants.org.au/
Myaccountingcourse. 2018. Adjusting Entries. Retrieved March 26, 2018, from
http://www.myaccountingcourse.com/accounting-cycle/adjusting-entries
Nobes, C., & Parker, R. H. 2008. Comparative international accounting. Pearson Education
Plagiarism.org. 2018. What is Plagiarism? Retrieved March 26, 2018, from
http://www.plagiarism.org/plagiarism-101/what-is-plagiarism/
Sciencedaily. 2018. Computer Security: Reducing risks of malware infections. Retrieved
March 26, 2018 https://www.sciencedaily.com/releases/2013/12/131216142931.htm