Financial Analysis and Accounting Information System: Report

This report provides a detailed financial analysis of LAM MINH TUAN LE 18574658 for the month of May. It includes an examination of journal entries, ledger balances, and the trial balance, highlighting key figures such as sales, direct expenses, and owner's equity. The analysis extends to the preparation of the income statement, revealing a loss of $2,822 due to increased interest expenses, and the balance sheet, which outlines the company's assets and liabilities. Charts illustrating expenses and current assets provide a visual representation of the company's financial position, offering insights into its operational performance and financial health during the specified period. Desklib provides access to this document, offering students valuable study tools and resources.

Running head: ACCOUNTING AND INFORMATION SYSTEM
Accounting and Information System
Name of the Student:
Name of the University:
Author’s Note:

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Table of Contents
Introduction................................................................................................................................2
Financial analysis.......................................................................................................................2
References..................................................................................................................................6
Appendix....................................................................................................................................6

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Introduction
The primary purpose of the discussion in the following study deals with a vivid
financial analysis to evaluate the financial position of the month of May for the chosen
organization of LAM MINH TUAN LE 18574658. It has been identified that the entity have
had several transaction in the month which have been recorded in the books of journal for the
purpose of preparation of financial statements that includes the balance sheet and the income
statement. Further, it has been observed that the LAM MINH TUAN LE 18574658 has been
involved in operations such as sale and buy of the various stocks (Grant 2016). In order to
analyze the financial performance for the month of May the income statement and the
balance sheet has been prepared in the company. In addition to there is preparation of the trial
balance which have been represented in the below table in the appendix.
Financial analysis
The transaction record during the year are made by passing the journal entries for the
month of May accompanying by ledger entries where the journal balances are transferred in
order to find out the arithmetical accuracy and the credit and debit side balance(Barr 2018).
The next step after the ledger account comes the trial balance where all the balances
of ledger are transferred to identify the errors in the process of bookkeeping that consists of
errors of mission and commission (Bardach and Patashnik 2015). It can be identified while
the preparation of the trial balance that sales in the credit column is shown as $9829. There
are also the items such the direct expenses that consists of the motor vehicle expenses that
amounts to $ 531and the cost of goods sold that amounts to $ 5,932.In the trial balance there
is also the amount of owner capital equity amount to $ 200000 which makes the total amount
trial balance to $566660 in both debit side and credit side. The match in both the sides
represents that the bookkeeping process was accurate (Lau 2016).

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In the preparation of the financial statement, the statement profit and loss or the
income statement represents the amount of profit in the month of May that has been
generated by the company from the business operation (Tjia 2018). The statement of profit
and loss shows the profitability of the business from the sale of the products that they
manufacture. The company of LAM MINH TUAN LE 18574658’s primary source of income
is the the revenue that is earned from sale in the month of May in the present case. Another
major source of income or the secondary income as identified are interest of the investment.
For the month of May the total amount of sale is $ 9829 and the amount of interest $706.
The below pie chart represents the number of expenses incurred for the month of May
in the year in terms of $ and percentage.
306; 4%
2042; 28%
531; 7%
4545; 61%
Expenses
Depreciation Interest Expense
Motor Vehicle Expenses Rent
Figure 1: (Pie Chart Showing Expenses of the Company for the Month of May)
Source: (Created by Author)
The chart above shows the businesses operating expenses that took place in the month
of May. As per the report it can be seen that the major part of the operating expenses amounts
to $ 4545. The rest is the rent amount that a fixed expenses of the organization that incurs

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irrespective of the production of the business on a regular basis. There has been an amount of
$ 2042 which is another major expenses that is the interest amount of the loan. In the balance
sheet it can be seen that the amount of interest which is due to the loan amount by the
business (Ibn-Homaid and Tijani 2015). There are also items like the motor vehicle expenses
amounting to$ 531 and the depreciation with an amount of $ 306 found in the profit and loss
statement. A loss of $ 2,822 has also been pointed out due to increased interest amount in the
financial statements of LAM MINH TUAN LE 18574658. The increase in the operating
expenses may be the probable reason for the downfall.
The company’s balance sheet that represents the financial position of the business for
the month of May consists of the various recorded assets and the liabilities recorded for the
month of May (Visser and Tolhurst 2017). In the following graph below represents a
description of all the current assets of the company for the month of May:
A c c o u n t s R e c e i v a b l e
I n t e r e s t R e c e i v a b l e
I n v e n t o r y
O ffi c e S u p p l i e s
P r e p a i d A d v e r ti s i n g
P r e p a i d R e n t
0.00
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
Current Assets
Figure 2: (Chart Showing Current Assets of the Company for the Month of May)
Source: (Created by Author)

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The chart as shown above consists of the vivid description of the company’s items of
current asset as shown in the balance sheet that comprises of office supplies, prepaid rent,
prepaid advertisement, inventories, and interest (Edwards 2014). The total of the amounts
current assets of the company in the month of May amounts to $22727.27 that consists of the
prepaid rent and advertisement for business for the month of May. Additionally, the balance
sheet also has the amount of inventory amounted to $12468.10 as shown in the chart, which
is the closing stock for the month of May of the company. There is also the fixed assets that
consists of the motor vehicles and office furniture making the total asset side amounting to $
546,344.85 along with the amount of $200000 that represents the company’s equity.

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References
Bardach, E. and Patashnik, E.M., 2015. A practical guide for policy analysis: The eightfold
path to more effective problem solving. CQ press.
Barr, M.J., 2018. Budgets and financial management in higher education. John Wiley &
Sons.
Edwards, D., 2014. The Link between Company Environmental and Financial Performance
(Routledge Revivals). Routledge.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley &
Sons.
Ibn-Homaid, N.T. and Tijani, I.A., 2015. Financial Analysis of a Construction Company in
Saudi Arabia. International Journal of Construction Engineering and Management, 4(3),
pp.80-86.
Lau, C., 2016. Financial Management.
Tjia, J., 2018. Building Financial Models: The Complete Guide to Designing, Building, and
Applying Projection Models. McGraw Hill Professional.
Visser, W. and Tolhurst, N., 2017. The world guide to CSR: A country-by-country analysis
of corporate sustainability and responsibility. Routledge.

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Appendix

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