Financial Statement Analysis of IT Smart

Accounts 506

Table of Contents
2. Adjustment entries:..................................................................................................................2
3. Closing entries:........................................................................................................................3
4. Adjusted trial balance:.............................................................................................................4
5...................................................................................................................................................5
a. Income statement..................................................................................................................5
b. Statement of retained Earnings:............................................................................................5
C & d. Balance-sheet and comparative balance-sheet.................................................................6
e. Common-size Comparative balance sheet...............................................................................7
6. Ratio analysis:..........................................................................................................................8
7...................................................................................................................................................9
a. Improve the financial position..............................................................................................9
b. Ratio analysis:.......................................................................................................................9
c. Comparative balance sheet and common-size comparative balance sheet.........................10
d. Other issues:........................................................................................................................10

2. Adjustment entries:
Particulars Entry Dr Cr
I. Entry for outstanding
salary Salary Account Dr.
To salary outstanding account
To PAYG account
2380
2200
180
II. Entry for outstanding
Electricity bill
Electricity Account Dr.
To Bill outstanding account
450
450
III. Licencing Agreement P&L account Dr.
To licencing agreement
1200
1200
IV. Deprecation P&L account Dr.
To Accumulated profits
2545.45
2545.45
V. Salary transfer P&L account Dr.
To Salary account
2380
2380
3. Closing entries:
Particulars Entry Dr Cr
i. Revenue
service revenue
sales revenue
gain on sale of investment
purchase discount
To P& L account
8181.08
19291
1050
209.09
28731.82
ii. Entries for
nominal
accounts
P& L account
To salaries expenses
To advertising expenses
To Rent Expenses
To other expenses
13837.27
10060
3181.82
500
95.45

4. Adjusted trial balance:
Particulars
Unadjusted trail
balance Adjustment
Adjusted trial
balance
Dr Cr Dr Cr Dr Cr
Cash 13852 13852
Supplies 192.27 192.27
Accounts Receivables 2050 3200 205 5045
Allowance for doubtful Account 205 205 0
Inventories
14619.
3
14619.2
7
licencing agreement 1200 1200 0
furniture
2227.2
7 2227.27
acc. Deprecation furniture 119
445.45
4
564.45
4
Equipment 10500 10500
acc. Deprecation equipment 1313 2100 3413
Accounts payable 1120 1120
GST 809.27 809.27
PAYGW 1330 180 1510
Capital stock 5700 5700
Retained earnings 19970
4195.4
5
15774.
6
service revenue
8181.8
2
8181.8
2
sales revenue
16090.
9 3200
19290.
9
gain on sale of investment 1050 1050
purchase discount 209.09 209.09
salaries expenses 7680 2380 10060
advertising expenses
3181.8
2 3181.82
rent expenses 500 500
other expenses 95.45 95.45
Outstanding liability of salary 2200 2200
Outstanding liability of electricity
bill 450 450
Total
60273.0
8
60273.
1