Financial Statements and Accounting Software Analysis - ACCT305

This finance assignment, prepared for ACCT305, presents a complete solution for financial statement analysis and accounting software evaluation. Part A includes the preparation of an income statement, balance sheet, and statement of changes in equity for Chan Home Services. The financial statements are meticulously presented, showing the company's financial performance and position. Part B focuses on analyzing the company's financial situation and recommending suitable accounting software. The analysis highlights the company's small size and suggests using MYOB as a cost-effective and efficient accounting software solution, providing reasons for the recommendation, including ease of installation, budget considerations, and the software's suitability for small and medium-sized businesses. The assignment emphasizes the importance of accurate financial record-keeping and the benefits of using accounting software to streamline processes and reduce errors, backed by relevant references.

Accounting
Information and
System

FINANCE 1
Part A
Income Statement
Biker are better Inc.
Income Statement
(for the year ending 31st December 2018)
Particulars 2018
Revenue
$
34,000.00
Less: Cost of goods sold
$
-
Gross Profit
$
34,000.00
Operating Income
Other income
$
12,500.00
Operating expenses
General & Admin Expenses
Rent
$
3,250.00
Salaries
$
27,500.00
Depreciation Expense and
Equipment
$
2,000.00
Total Operating expenses
$
32,750.00
Earnings before interest and tax
$
13,750.00
Interest
$
250.00
Earnings before tax
$
13,500.00
Less: Tax -
Profit After Tax
$
13,500.00

FINANCE 2
Balance Sheet Statement
Chan Home Services
For the month ended 29 February 2020
Balance Sheet
Amount Amount
Assets
Current Assets
Cash $45,000
Accounts Receivable
$
19,500.00
Prepaid rent
$
8,850.00
$
73,350.00
Non-Current Assets
Equipment
$
47,500.00
Less: Acc. Depreciation Equipment $8,000
$
39,500.00
Total Assets
$
112,850.00
Liabilities
Current Liabilities
Accounts Payables
$
9,000.00
Interest payable
$
250.00
$
9,250.00
Non-Current Liabilities
Loan Payable
$
15,600.00
$
15,600.00
Shareholder's Capital
Capital
$
80,000.00
Less: Withdrawals (Drawings
$
5,500.00
Add: Net Profit
$
13,500.00
$
88,000.00

FINANCE 3
Total Shareholder's Liabilities and
Equity
$
112,850.00
Statement of Change In Equity
Chan Home Services
Statements of Change in Equity
For the month ended 29 February 2020
Share Capital Retained Earnings
Total
Equity
Opening
Balance $ - $ - $ -
Share Issued
$
80,000.00
$
80,000.00
Net income
$
13,500.00
$
13,500.00
Ending Balance
$
80,000.00
$
13,500.00
$
93,500.00
Part B
In the Part A, the financial statements have been prepared to record the financial transactions. By
preparing the financial statements of Elaine Chan, it is observed that the company financial
situation is not good as it earns the less amount of net income which states that it is a small size
business. The capital amount of the company is $88000 which defines the small size companies.
As Elaine Chan wants to change the MS excel for her company in order to record the financial
transactions. Elaine Chan has to find the accounting software packages which is cost effective or
included the cost that she can afford easily. After all the analysis, it is suggested that she has to
use the Myob as the accounting software packages for recording commercial transactions.
Myob is an Australian multinational corporation that offers the tax, accounting and the other
business services in single software (Myob, 2020). This application is useful for the small and

FINANCE 4
medium size business. The main reason of using the application is that it is easy to install with
less period of time which also helps her to save the time. Installation is a biggest challenge for
the company but Myob makes it easy for the company in terms of installation as it is easy to
install this accounting software package (Myob, 2020).
The other reason to choose this software is that it is under her budget which is also major factor
for this organization. The company gets the less amount of return as the profit due to which its
ability to expand is also less. The amount of capital and profit of the year states that this is a
small size of business. It has been found that this application is suitable for the small and medial
size of business that is why; it is appropriate software for accounting for the company
(Whizconsulting, 2019).
It is observed that there are many services those are available in a single software which is
beneficial for the company as it save money. It is evaluated that this software records all the
commercial transaction and also treat it in terms of accounting and taxation. The wide range of
services in single accounting software is an advantage for the company. By recording all the
transactions in the software helps to ensure the accuracy of inputs and processing
(Whizconsulting, 2019). The main motive to design the financial statements is to maintain the
accounts in order to reduce the mistakes and frauds. This software evaluates all the accounting
amounts which directly help to meet all the requirement of an organization to record or to
maintain the financial statements.
Easy to design the financial account is also an advantage of Myob as software. It is evaluated
that MS Excel is easy to operate but changing the application might generate the challenges in
terms of operation. But Myob is beneficial for the company because it helps to design the

FINANCE 5
financial account easily (Whizconsulting, 2019). It is an appropriate choice for the company to
select Myob by replacing the MS Excel for accounting.

FINANCE 6
References
Myob. (2020) Australia's #1 business software. Available From: https://www.myob.com/au/
[Accessed 12/3/2020].
Whizconsulting. (2019) Benefits Of Using MYOB Accounting Service. Available From
https://www.whizconsulting.net/benefits-of-using-myob-accounting-service/ [Accessed
12/3/2020].