Summary Report Financial Statements

Summary Report: Financial Statements Introduction The purpose of this paper is to perform as a certified public accountant (CPA) who is working with a small bakery to prepare their financial statements for three months of the current fiscal year. Throughout this course, I have seen similar variables overlap within my current profession. This Accounting course has provided me the tools to understand the inner workings of day-to-day accounting operations. Being able to analyze budgets, as well as inventory, have been crucial to understanding this course. Additionally, the purpose of these financial statements is to provide information on financial accounting cycles. When we collect, store, and process financial and accounting data and produce informational reports that stakeholders can use to make business decisions. Ultimately, financial accounting plays a pivotal role in a company’s revenue, expenses, liabilities and operation status. Aiding to make important financial decisions, this contributes to the success of the company. Financial Statement Analysis To accurately analyze the financial performance, I have precisely captured business transactions for October through December. Preparing and posting all closing entries. Each closed revenue account has been debited, and income summary credited. Likewise, I have credited the expense accounts, and debited income summary. Additionally, I have completed the unadjusted trial balance, ensuring the total debits and credits correspond. The adjusting entries and adjusted trial balance have also been adjusted to coincide. Lastly, creating the following financial statements: income statement, statement of owner’s equity, balance sheet, closing entries and post-closing trial balance to “close the books”. A cash position can also be found by looking at a company's free cash flow (FCF). Free Cash Flow = Net income + Depreciation/Amortization – Change in Working Capital – Capital Expenditure. The company’s net income as a percentage of sales is 53.34%, which is net income divided by total revenues. To calculate the current asset position, I computed it as current assets divided by current liabilities which came to 8.51. Once I have corrected the journaling, adjusting and preparation of the financial statements, I will prepare and post all closing entries. Each closed revenue account will be debited and income summary with be credited. Each closed expense account will be credited, and income summary will be debited. Income summary will then be debited, and the retained earnings will be credited. Lastly, the retained earnings account will be debited, and the dividends account will be credited. Once the closing entries have been made, the expense, revenue and dividends accounts will be set to zero. The balance of the retained earnings will need to equal the amount on the retained earnings statement and balance sheet Once I have corrected the journaling, adjusting and preparation of the financial statements, I will prepare and post all closing entries. Each closed revenue account will be debited and income summary with be credited. Each closed expense account will be credited, and income summary will be debited. Income summary will then be debited, and the retained earnings will be credited. Lastly, the retained earnings account will be debited, and the dividends account will be credited. Once the closing entries have been made, the expense, revenue and dividends accounts will be set to zero. The balance of the retained earnings will need to equal the amount on the retained earnings statement and balance sheet Once I have corrected the journaling, adjusting and preparation of the financial statements, I will prepare and post all closing entries. Each closed revenue account will be debited and income summary with be credited. Each closed expense account will be credited, and income summary will be debited. Income summary will then be debited, and the retained earnings will be credited. Lastly, the retained earnings account will be debited, and the dividends account will be credited. Once the closing entries have been made, the expense, revenue and dividends accounts will be set to zero. The balance of the retained earnings will need to equal the amount on the retained earnings statement and balance sheet