Financial Statement - XYZ Imports, Australia

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FINANCIAL STATEMENT – XYZ IMPORTS, Australia
ADVANCED FINANCIAL
ACCOUNTING
ASSIGNMENT

1
Contents
Background and Introduction..................................................................................... 2
Discussion and analysis.............................................................................................. 2
Conclusion.................................................................................................................. 5
References................................................................................................................. 6
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2
Background and Introduction
XYZ Imports is a small local company which deals in manufacturing electronic components for the
computer. The company also has a small research and development staff and is privately owned. The
financial statements have not been prepared as per GAAP and the same has not been audited as well.
There are several accounting issues due to which the reinstatement of the financial statements of required.
The financials have also been reviewed to suggest if the bank should offer credit facilities to XYZ.
Discussion and analysis
a. Reinstated financial statements of the entity as per relevant GAAP
Assets Amt. Liabilities Amt.
Current assets: Current liabilities:
Cash $444,000 Accounts payable $800,000
Accounts receivable 505,714 Interest on Notes Payable 42,400
Less: Provision for bad debt -25,286 Accrued expenses payable 100,000
Inventories 1,920,000 Total current liabilities $942,400
Advance income tax 166,394
Prepaid expenses 30,000 Noncurrent liabilities:
Total current assets $3,040,823 Notes payable $2,120,000
Noncurrent assets: Total Liabilities $3,062,400
Property, plant & equipment, gross $3,940,000
Less: Accumulated depreciation -1,360,000
Property, plant & equipment, net 2,580,000 Owners’ equity
Common stock, $1 par 2,000,000
Land 1,060,000 Retained earnings 1,618,423
Deferred research & development costs 0 Total owners’ equity 3,618,423
Total assets $6,680,823 Total liabilities & owners’
equity $6,680,823
As of December 31, 2019
XYZ Imports
Balance Sheet
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