Financial Statement Analysis: Trial Balance and Profitability Analysis
Introduction
[In this section, include the purpose of the report. Describe the kind of information these financial statements provide to various aspects of the business.]
Process
[In this section you will discuss the process you used to generate accurate financial statement results for the business owner from the list of business transactions provided. Explain what is being communicated through each of the financial statements you prepared (income statement, statement of equity and balance sheet) and how this information will be used in business decision making and planning.]
Financial Statement Analysis
[This section should center on your analysis of the financial performance of the company based on the statements you prepared. Discuss key points on your observations of results: Is the company operating profitably (what percent of revenues result in profit/net income)? How well poised are they to meet liabilities (discuss liquidity and current ratio)?.]
Internal Controls
[Provide suggestions for a simple system of internal controls to assist the owners in protecting assets and ensuring accuracy in financial data. Consider additional controls that will support the potential for adding merchandise and additional assets with business growth/expansion.]
Trial balance
Balance Sheet as of June 30:
Assets
Liabilities
Current Assets:
Current Liabilities:
- Cash
$27,000
- Accounts Payable
$905
- Prepaid Rent
$7,170
- Wages Payable
$325
- Accounts Receivable
$1,475
- Business License Expense
$250
- Office Supplies
$750
- Accrued Liabilities
$325
- Prepaid Insurance
$750
Long-Term Liabilities:
Non-Current Assets:
- Loan Payable
$25,000
- Vehicle
$15,000
Owner's Equity:
Accumulated Depreciation
$250
- Owner's Equity
$27,395
Total Assets
$52,395
Total Liabilities and Owner's Equity
$52,395
Income Statement
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