Financial Accounting: Transactions & Statements

This financial accounting assignment focuses on analyzing a series of transactions and their impact on a company's financial statements. It includes tasks like preparing an income statement and balance sheet, understanding the effects of various transactions on different accounts, and providing explanations for each transaction. The assignment aims to solidify students' understanding of fundamental accounting principles.

Running head: MANAGERIAL ACCOUNTING
Managerial Accounting
Name of the Student:
Name of the University:
Authors Note:

MANAGERIAL ACCOUNTING
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Table of Contents
1. Evaluating the accounting principles used in Canada:...........................................................2
2. Multiple choice.......................................................................................................................2
3a. Preparing comprehensive income statement:.......................................................................2
3b. Preparing statement of financial position:............................................................................3
4a. Calculating profit for the year:.............................................................................................4
4b. Calculating shareholder equity at the end of the year:.........................................................4
5. Providing explanation for each transaction:...........................................................................4
Reference and Bibliography:......................................................................................................6

MANAGERIAL ACCOUNTING
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1. Evaluating the accounting principles used in Canada:
Currently in Canada the accounting principle that is been used in Canada is IFRS and
AcSB. This change is mainly conducted in 2011, where companies were made to switch from
GAAP to IFRS systems (Pwc.com, 2017).
2. Multiple choice
S3.1) Answer C (Income + Asset = Equity)
S3.2) Answer D (All the above)
S3.3) Answer D (Total assets will not change)
S3.4) Answer C (Increasing assets and increasing accounts payable)
S3.5) Answer A (Profit of $15,000 and cash of $40,000)
S3.6) Answer A (Profit of $20,000, cash of $30,000, and equity of $100,000)
S3.7) Answer B (75,000)
S3.8) Answer B (Statement of financial position, profit, and cash flow)
S3.9) Answer D (Increase in accounts receivables and increase sales)
S3.10) Answer B (Profit of $38,000, cash of $33,000, and shareholders’ equity of $63,000)
S3.11) Answer B (240,000-125,000=115,000)
S3.12) Answer B (Increasing accounts payable and increasing assets)
3a. Preparing comprehensive income statement:
Income statement Amount Amount

MANAGERIAL ACCOUNTING
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Sales 34000
cost of sales 20500 13500
Rent 2200
Advertisement 150
Salaries 5500
Utilities 550
Dividend 1000 9400
Profit 4100
Retained earnings May 14,850
Retained earnings June 18,950
3b. Preparing statement of financial position:
Balance Sheet Amount Amount
Cash $8,300
Accounts Receivable $7,600
Inventory $19,850
Current assets $35,750
Equipment $5,500
Total assets $41,250
Accounts payable $9,300
bank loan $3,000
Total liabilities $12,300
Net assets $28,950

MANAGERIAL ACCOUNTING
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Common shares $10,000
Retained earnings June $18,950
Total stock holder equity $28,950
4a. Calculating profit for the year:
Particulars Amount
Income 135,000
Rent expense 10,000
Salary expense 75,000
Advertising expense 15,000
Profit 35,000
4b. Calculating shareholder equity at the end of the year:
Particulars Amount
Shareholder’s equity at the beginning of the year 71,000
Retained income 35,000
Shareholder’s equity at the end of the year 106,000
5. Providing explanation for each transaction:
Income statement Balance sheet
Revenues Expenses Assets Liabilities Equity

MANAGERIAL ACCOUNTING
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1 ↑ $14,000 ↑ $14,000 ↑ $14,000
2 0 0 0 0 0
3 ↑ $25,000 ↑ $25,000
4 ↓$500 ↑ $500
5 ↓$500 ↓$500
6 ↑ $10,000 ↑ $10,000
7 ↓$5,000 ↓$5,000
8 ↓$200 ↓$200
9 ↓$2,000
10 ↓$12,000 ↑ $12,000
11 ↓$45 ↓$45
12 ↑ $900 ↑ $900 ↑ $900