Cost Accounting: Financial Statement Analysis & Reporting Task

This assignment solution provides a detailed analysis of a company's financial statements from a cost accounting perspective. It covers key elements such as contract costs, provision for income taxes, retained earnings, contract receivables, equipment, accounts payable, and the total liability and stockholder's equity. The solution explains how each figure is derived and its significance in understanding the financial health of the company, with references to relevant accounting studies and principles. This document aims to help students understand the intricacies of financial statement analysis and reporting.

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Business administration 2
ABSTRACT
The report begins with a brief introduction on what is to be covered. This is then followed by the
literature review and finally the references from where data used in the literature review was
sourced from.

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Table of Contents
INTRODUCTION...........................................................................................................................4
CONTRACT COST.........................................................................................................................4
PROVISION FOR INCOME TAXES.............................................................................................4
RETAINED EARNINGS, BEGINNING BALANCE....................................................................4
CONTRACT RECEIVABLES........................................................................................................4
EQUIPMENT..................................................................................................................................5
ACCOUNTS PAYABLE................................................................................................................5
TOTAL LIABILITY AND STOCKHOLDER’S EQUITY............................................................5
It was obtained summation of total liabilities and total stockholder’s equity.................................5
RETAINED EARNINGS................................................................................................................5
REFERENCE..................................................................................................................................6

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INTRODUCTION
The report is based on a brief statement on figures reported in a company’s books of account.
CONTRACT COST
Contract costs are expenses that are incurred by a company for its provision of
goods and services by a contractor and are a liability. In this case scenario, the final figure was
obtained by subtracting the gross profit from the contract revenues. (Ashworth & Perera 2015).
PROVISION FOR INCOME TAXES
These are the income taxes that a business estimates it will pay in the current year
and is a current liability. The gap for provision for income tax was obtained by subtracting net
income from the income before provision for income taxes. (Cazier, et al 2015).
RETAINED EARNINGS, BEGINNING BALANCE
These refers to the previous year’s retained earnings carried forward and are used
to calculate the current closing balance by subtracting net income and is an asset. The beginning
balance gap was calculated by summation of the retained earnings, closing balance to the net
income. (Ball, et al 2017).
CONTRACT RECEIVABLES
This is uncollected amount from customers. It was obtained from subtracting other
assets from total current assets.

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EQUIPMENT
This is what the company owns. It was obtained from total current assets from total
assets.
ACCOUNTS PAYABLE
These are monies owed to creditors. It is total current assets less given liabilities.
TOTAL LIABILITY AND STOCKHOLDER’S EQUITY
It was obtained by summation of total liabilities and total stockholder’s equity.
RETAINED EARNINGS
This is firm’s profit after dividends. It is the total stakeholders less (common stock +
additional paid in capital).

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REFERENCE
Ashworth, A., & Perera, S. (2015). Cost studies of buildings. Routledge.
Ball, R., Gerakos, J. J., Linnainmaa, J. T., & Nikolaev, V. V. (2017). Earnings, retained earnings,
and book-to-market in the cross section of expected returns.
Cazier, R., Rego, S., Tian, X., & Wilson, R. (2015). The impact of increased disclosure
requirements and the standardization of accounting practices on earnings
management through the reserve for income taxes. Review of Accounting
Studies, 20(1), 436-469.