Financial Reports: Overview, Analysis, Income Statement, Trial Balance

This report provides an overview of financial reports, including the recording of the asset register, journal entries, and preparation of the trial balance. It also includes analysis of assets, journal entries for insurance, and creation of bad debts. The report further includes an income statement and trial balance. Subject: Finance

Running Head: FINANCIAL REPORTS 1
FINANCIAL REPORTS

Running Head: FINANCIAL REPORTS
Table of Contents
Overview.....................................................................................................................................................3
Analysis........................................................................................................................................................3
Income Statement.......................................................................................................................................4
Trial Balance................................................................................................................................................5
References...................................................................................................................................................6

Running Head: FINANCIAL REPORTS
Overview
The financial reports are prepared in accordance with the guidelines and the necessary
framework. This report indicates the recording of the asset register, the journal entries and the
preparation of the trial balance. The statements are required to be prepared for the purpose of the
decision making. Further the detailed explanations are also given in order to produce the results
and there interpretation (Du Stevens and McEnroe, 2015).
Analysis
As per the scenario the assets are recorded as the written down value and the recording is also
done in the asset register. The BBQ Stamping machine and the BBQ steam Welder are also
required clubbed together. The life of the asset is 10 years and thereafter the depreciation rate is
calculated by dividing the life by 100% and multiplying it by 2.
Secondly the journal entries are passed and for the insurance have been transferred from the
prepaid insurance to the monthly payments. The entry would be reversed and the new entry
would be done to show the insurance as an expense. The insurance will be paid in cash
respectively (Būmane, 2018).
Journal Entries
Date Particulars
F.L
. Debit Credit
31st
July
Insurance expense
6010
Dr
.
GL
7
$
400.00
To cash a/c
$
400.00
for insurance of month of July
created
Lastly the amount of the bad debts has also been created by lowering down the amount of the
accounts receivable, as it was necessary.

Running Head: FINANCIAL REPORTS
Date
Particular
s F.L. Debit Credit
31st July Bad debts expenses Dr.
JZ34
5
$
5,700.00
To Accounts Receivable
$
5,700.00
for bad debts recorded
Income Statement
Income statement
(For the month ending 31st July 2018)
Particulars Amount Particulars Amount
Freight 10000 By Revenue 1375000
Purchases 403000 By closing stock 84000
Gross profit 1077000
1490000 1459000
By gross profit 1077000
Admin and Sales 225000
Interest Expense 97000
Bad debts 5700
Depreciation 49000
Tax 210090
Net Profit 788210
1375000 1375000
The income statement has been prepared so that the figure of the cost of the goods sold can be
calculated. Moreover the income statements determine the clear distribution of the income and
the expenses. The income statement also depicts the amount of the net profit that will ultimately
be shared with the investors and the shareholders who have invested in the company (Lee, 2016).

Running Head: FINANCIAL REPORTS
Trial Balance
The trial balance is prepared in order to get the idea of the adjustments and the changes made
during the entire year. This trial balance is also known as the post-trial balance as the
adjustments are made. Further the trial balance is necessary as a supporting tool in transferring
the amounts to the proper accounts (Lee, Shin, Vetter and Kim, 2017).
Trial Balance
Account Name Debit Credit
Cash $ 555,900.00
Accounts Receivable $ 111,300.00
Inventory $ 84,000.00
Prepaid Insurance $ 4,800.00
Equipment $ 245,000.00
Acc. Depreciation - Equipment $ 49,000.00
Accounts Payable $ 125,000.00
Insurance Payable $ 4,800.00
Interest Payable $ 86,090.00
Loan Payable $ 361,300.00
Sales $ 1,375,000.00
Freight $ 10,000.00
Purchases $ 403,000.00
Depreciation $ 49,000.00
Bad debts $ 5,700.00
Interest Expense $ 97,000.00
Insurance Expense $ 400.00
Admin and sales $ 225,000.00
Income tax $ 210,090.00
Total $ 2,001,190.00 $ 2,001,190.00

Running Head: FINANCIAL REPORTS
References
Būmane, I., 2018. The methodology of the statement of comprehensive income and its impact on
profitability: the case of Latvia. Entrepreneurship and Sustainability Issues, 6(1), pp.77-86.
Du, N., Stevens, K. and McEnroe, J., 2015. The effects of comprehensive income on investors’
judgments: An investigation of one-statement vs. two-statement presentation
formats. Accounting Research Journal, 28(3), pp.284-299.
Lee, B.B., Shin, H., Vetter, W. and Kim, D.W., 2017. Management of income statement
variables to report small positive earnings numbers. Asian Review of Accounting, 25(1), pp.58-
84.
Lee, D.K., 2016. Method and apparatus for accounting process using integrated trial balance.
U.S. Patent Application 15/074,072.