summarize what the financial statements indicate about the company's financial health and performance. In this section, you need to discuss the following:

1. Purpose: Discuss the accounting process and the resulting financial statements
2. Process: Explain the process used to produce accurate account balances and financial statements from the individual transaction data. This includes a step-by-step description of everything we do, starting from making the original journal entry through closing entries.
3. When writing this section, consider what is communicated through each financial statement you prepared (income statement, statement of equity, and balance sheet) and how this information will be used in business decision-making and planning.
4. Analysis: Explain the company's cash position, net income as a percentage of sales, and current liabilities to current assets. This requires calculating two "ratios."

C. Results: Discuss the profitability of the first month of operations. In this section, you need to discuss the following:

• Consider how well the company is positioned to meet current liabilities. How much cash do they have relative to what they owe?
• Be sure to include the percentage of revenues that result in profitet income and the current ratio when discussing profitability and liquidity based on the recorded month's results.
• Consider key points in your observations of results: is the company operating profitably (what percent of revenues result in profitet income)? How well-poised are they to meet liabilities (discuss liquidity and current ratio)?

C. Recommendations: Recommend a simple system of controls that can be implemented to ensure the protection of company assets and the accuracy and integrity of their financial data as they anticipate further growth.

• Consider additional controls to support the potential to add merchandise and assets with business growth/expansion.

D. Asset Valuation: Discuss the treatment of current and long-term assets on the balance sheet.

• Discuss at least two different methods of depreciation. Consider how the methods of depreciation will be determined.
• Discuss how LIFO, FIFO, and average methods will differ and provide examples of types of applicable merchandising.
• Consider how accounting will change with the addition of merchandise inventory.

A Company Income Statement For Month ending 06/30/20XX Revenues Pos ting to the ledgen/t accounts Don't overthink it! You are just pos ting each debit and credt from the joumal entries to the account you idensfed in the entry- These accounts ane set to calculate your balances for you. Please be caneful not to delete the nunning totals as thos e will calculate the ending balance. The ending balance will trans fer to the Trlal Balance sheet. If you have pos ted all emties and your tilal balance is not in balance (total debiss = total credis) this means that there is an enor. A Company Income Statement For Month ending 06/30/20XX Revenues Pos ting to the ledgen/t accounts Don't overthink it! You are just pos ting each debit and credt from the joumal entries to the account you idensfed in the entry- These accounts ane set to calculate your balances for you. Please be caneful not to delete the nunning totals as thos e will calculate the ending balance. The ending balance will trans fer to the Trlal Balance sheet. If you have pos ted all emties and your tilal balance is not in balance (total debiss = total credis) this means that there is an enor