Financial Statement Analysis: MPA702 Financial Interpretation

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MPA702 Financial Interpretation
1

Table of Contents
Part 1:...............................................................................................................................................3
a):.................................................................................................................................................3
b):.................................................................................................................................................6
2

Part 1:
a):
Recording of financial transactions:
Transaction Analysis Chart
Date
Feb
Assets Liabilities Owner’s equity
Assets = Liabilities (+) Owner’s equity
1 (+) Cash 240000
- Equity introduced
240000
2 Small office 420000
(-) cash deposit 42000
378000
Bank Loan = 378000
378000
0
3
Computer equipment = 12000
(-) Cash = 12000
0 0 0
4
Engineering equipment = 9500
= 9500 0
Equipment
contribution = 9500
Office furniture = 4000
3

5 (+) office stationary = 500
(+) Insurance right = 3600
(-) Cash paid = 7600
= 500
Credit purchse = 500
= 500 0
6 Motor vehicle = 35000
= 35000
Credit buy of motor =
35000
0
12 Rockmans Refrigeration = 3400 0 Sales = 3400
16 Client = 3500 0 Sales = 3500
17 (+) Cash = 3400
(-)Rockmans Refrigeration =
3400
= 0
0 0
18 (-) Cash = 1400 Pay-G = 300 Wages = 1100
25 (+) Client (Debtor) = 4800
= 4800
0 Sales = 4800
4

28
(-) Cash = 2800 (-) Loan = 1600 Interest = 1200
28 (-) Cash = 2000 0 (-)Capital = 2000
5

b):
Income statement showing net profits for the period ending 28- feb-2019
Particulars Amount
Revenue 11700
Less:
Insurance 300
Office stationery 500
Wages (Including Pay-G) 1400
Interest 1200
Deprecation 1075 4475
Net profit 7225
Working note: Deprecation chart:
Deprecation Rate
Book
value
Monthly
Deprecation Reduced value
Motor vehicle 20% 35000 583.33 34417
Engineering
equipment 20% 9500 158.33 9342
Computer equipment 30% 12000 300 11700
Office Furniture 10% 4000 83.33 3917
6

Total 60500 1125 59375
Statement of financial position as on 28-Feb-2019
Assets Amounts
Current Asset
Cash 175900
Pre-paid Insurance 3300
Office stationery 500
Debtors 8300 188000
Non-current Asset
Office 420000
Motor Car 34417
Engineering equipment 9342
Computer equipment 11700
Office Furniture 3917 479375
Total Assets 667375
Liabilities
Current Liabilities
General expenses 450
Pay-G 300
Outstanding payment for Office stationery 500
outstanding payment for motor vehicle 35000 36250
Non-current Liabilities
Bank Loan 376400 376400
Total Liabilities 412650
Equity
7

Capital 240000
Equipment 9500
(+) Profits 7225
(Less) Drawings 2000 254725
Total of equity and liabilities 667375
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