Financial Accounting Project: An Analysis of Financial Statements

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FINANCIAL ACCOUNTING
Refrence List
Introduction......................................................................................................................................3
Task 1:.............................................................................................................................................4
Task 2:...........................................................................................................................................11
Task 3.............................................................................................................................................18
Task 4.............................................................................................................................................23
Conclusion.....................................................................................................................................28
Bibliography..................................................................................................................................29

Introduction
“Financial Accounting” is such a vital thing for the corporations that help them in recording
different transactions that are related to the finance of the corporation. The corporations do these
so that they can produce the “books of accounts” for a period of one financial year. “The books
of accounts” are prepared in a common process, which is known as “double entry book keeping”.
These are vital for the companies to work on so that all the financial transactions are recorded in
“the books of accounts” of the corporations. These are main things that are followed by the
corporations in preparing the “books of accounts”. These are vital for the corporations to follow
so that all the aspects of the “financial activities” are fulfilled.
The project will outline the different types of calculations that will show the use of the “financial
accounting” in the daily operations. These include “the journal, ledger, trial balance, profit and
loss account, cash flow statement and balance sheet”. These will be prepared in the report to
show the process through, which the things will be done. The project will also include the use of
the “bank reconciliation statement” that will help the corporation to check for any mistakes that
are done in either passbook or in the cashbook of the corporation. The project will also give an
idea as to how the control accounts are being used. These things will be available in the report.

Task 1:
“Record business transactions using double entry book-keeping, and be able to extract a
trial balance”
Introduction
This part of the report will show the basic process of “financial accounting” that are used by the
corporations. These items are performed in the corporation every day to record the transactions
in the “books of accounts”. This part of the report will throw the lights on “the journal, ledger,
and trial balance” of the corporations. These are very important for the corporation to fulfil the
process of the “double entry book keeping”. These are very helpful for the corporation. Journal is
a prt that starts the process of the “financial accounting”. These are very important for the
corporation to get the workings done properly in the “financial position”.
Balance as on
31st December, 2018
“Assets” Amount (£)
“Premises” 340000
“Van” 51250
“Fixtures” 8100
“Inventory” 63900
“Receivables”
“P Mullen” 1400
“F Lane” 3100
“Cash at Bank” 62400
“Cash in Hand” 5600

“Liabilities” Amount (£)
“Payables”
“S. Hood” 2150
“J. Brown” 4600
1.1
Trial Balance
As on 31st December, 2018
Particulars Amount (£) Amount (£)
“Premises” 340000
“Van” 51250
“Fixtures” 8100
“Inventory” 63900
“P Mullen” 1400
“F Lane” 3100
“Cash At Bank” 62400
“Cash in Hand” 5600
“S. Hood” 2150
“J. Brown” 4600
“Capital” 529000

535750 535750
Table 1: Trial Balance of Catherine Horton
(Source: Created by learner)
1.2
“Fixed Assets A/c”
Dat
e Particulars
J.F
. Amount (£)
Dat
e Particulars
J.F
. Amount (£)
“To Bank A/c” 340000
“To Bank A/c” 51250
“To Cash A/c” 8100
“To Balance
B/d” 463250 “To Bank A/c” 63900
463250 463250
“Debtors A/c”
Dat
e Particulars
J.F
. Amount (£)
Dat
e Particulars
J.F
. Amount (£)
“To Sales A/c” 4500
“By Balance B/d” 4500
4500 4500
“Cash in Hand A/c”
Dat
e Particulars
J.F
. Amount (£)
Dat
e Particulars
J.F
. Amount (£)
“By Opening
Balance” 5600
“To Balance
B/d” 5600
5600 5600

“Creditors A/c”
Dat
e Particulars
J.F
. Amount (£)
Dat
e Particulars
J.F
. Amount (£)
“By Purchase A/c” 6750
“To Balance
B/d” 6750
6750 6750
“Capital A/c”
Dat
e Particulars
J.F
. Amount (£)
Dat
e Particulars
J.F
. Amount (£)
“To Opening
Balance” 529000
“By Balance
B/d” 529000
529000 529000
“Cash at bank A/c”
Dat
e Particulars
J.F
. Amount (£)
Dat
e Particulars
J.F
. Amount (£)
“By Opening
Balance” 62400
“To Balance
B/d” 62400
62400 62400
“Trial Balance”
“As on 31st December, 2018”
Particulars Amount (£) Amount (£)

“Fixed Assets A/c” 463250
“Debtors A/c” 4500
“Cash in Hand A/c” 5600
“Creditors A/c” 6750
“Capital A/c” 529000
“Cash at bank A/c” 62400
535750 535750
1.3
“Journal Entries”
Date Particulars L.F. Debit (£) Credit (£)
1st January, 2019 “Storage A/c … Dr” 200
“To Bank A/c” 200
2nd January, 2019 “Purchase A/c …Dr” 6080
“To S. Hood” 1450
“To D. Main” 2060
“ To W. Tone” 960
“ To R. Foot” 1610
3rd January, 2019 “J. Wilson A/c …Dr” 1120
“T. Cole A/c …Dr” 1640
“F. Syme A/c … Dr” 2080
“J. Allen A/c … Dr” 910
“P. White A/c … Dr” 2420

“F. Lane A/c … Dr” 770
“ To Sales A/c” 8940
4th January, 2019 “Motor Expenses A/c … Dr” 470
“To Cash A/c” 470
7th January, 2019 “Drawings A/c … Dr” 1500
“To Cash A/c” 1500
9th January, 2019 “T. Cole A/c …Dr” 680
“J. Fox A/c … Dr” 1310
“To Sales A/c” 1990
11th January, 2019 “Purchase return A/c … Dr” 680
“To J. Wilson” 270
“To F. Syne” 4110
14th January, 2019 “Van A/c … Dr” 28800
“ To Abel Motors” 28800
16th January, 2019 “Bank A/c … Dr” 7020
“To P. Muller” 1400
“To F. Lane” 3100
“To J. Wilson” 850
“To F. Syme” 1670
19th January, 2019 “R. Foot A/c … Dr” 50
“To Purchase Return” 50

22nd January, 2019 “Purchase A/c …Dr” 3740
“To L. Mole A/c” 1830
“To W. Wright A/c” 1910
24th January, 2019 “S. Hood A/c … Dr” 3600
“J. Brown A/c … Dr” 4600
“R. Foot A/c … Dr” 1400
“To Bank A/c” 9600
27th January, 2019 “Salaries A/c … Dr” 4800
“To Bank A/c” 4800
30th January, 2019 “Business Rates A/c … Dr” 1320
“To bank A/c” 1320
31st January, 2019 “Abel Motors A/c …Dr” 20500
“To Bank A/c” 20500
Conclusion
Given above, are the presentations of the “journal, ledger and trial balance”. These are important
for the corporations to follow this process of the “journal entries, trial balance and ledger
accounts”. These help the corporation to learn the different ways as to check the process of how
these things takes place. These are very vital for the com

Task 2:
“Prepare final accounts for sole-traders, partnerships and limited companies in accordance
with appropriate principles, conventions and standards”
2.1
The preparations of the “final accounts” are very important for the companies. These are
perfor,ed on “the last day of the corporation”. These are very important for the companies so that
theyu get some position to check the financial statement and as well as many things.
2.2
“Statement of Profit and Loss”
“Fiscal year ends in December. Pounds in millions except per share data.” 2018
“Revenue” 265595
“Cost of revenue” 163756
“Gross profit” 101839
“Operating expenses”
“Research and development” 14236
“Sales, General and administrative” 16705
“Total operating expenses” 30941
“Operating income” 70898
“Interest Expense” 3240
“Other income (expense)” 5245
“Income before taxes” 72903
“Provision for income taxes” 13372

“Net income from continuing operations” 59531
“Net income” 59531
“Net income available to common shareholders” 59531
“Earnings per share”
“Basic” 12.01
“Diluted” 11.91
“Weighted average shares outstanding”
“Basic” 4955
“Diluted” 5000
“EBITDA” 87046
“Statement of Cash Flow”
“Fiscal year ends in December. Pounds in millions except per share data.” 2018
“Cash Flows From Operating Activities”
“Net income” 59531
“Depreciation & amortization” 10903
“Deferred income taxes” -32590
“Stock-based compensation” 5340
“Change in working capital” 34694
“Accounts receivable” -5322
“Inventory” 828

“Accounts payable” 9175
“Other working capital” 30013
“Other non-cash items” -444
“Net cash provided by operating activities” 77434
“Cash Flows From Investing Activities”
“Investments in property, plant, and equipment” -13313
“Acquisitions, net” -721
“Purchases of investments” -73227
“Sales/Maturities of investments” 104072
“Purchases of intangibles”
“Other investing activities” -745
“Net cash used for investing activities” 16066
“Cash Flows From Financing Activities”
“Debt issued” 6969
“Debt repayment” -6500
“Common stock issued” 669
“Common stock repurchased” -72738
“Dividend paid” -13712
“Other financing activities” -2564
“Net cash provided by (used for) financing activities” -87876