Summary Report

After you have finished preparing all the financial statements, analyze the statements and write a short report summarizing your findings. Use the template provided in the What to Submit section to complete your report. There is also a Final Project Walkthrough video available in Supporting Materials that will provide guidance for completing your template. In addition to the financial statement results, the owners have requested that you provide them with additional information as further growth is anticipated. They would like more input from you to support the best possible decisions for the business.

In addition, the owners are requesting that you provide them with some suggestions on simple internal controls they can integrate to ensure protection of company assets, and accuracy in the company's financial data. The owners are also considering acquiring more long-term/fixed assets, such as vehicles, equipment, buildings, and so on. They would like your input on the different options available for depreciation of these costs. Adding sales of product is also a consideration for expansion. The owners want to know what accounting considerations will be involved with this change.

Summary: Write a summary of what the financial statements indicate about the companys financial health and performance.

Purpose: Discuss the accounting process and the resulting financial statements as they relate to meeting the informational needs of the user.

Process: Explain the process used to produce accurate account balances and financial statements from the individual transaction data.

Consider 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.

Analysis: Explain the companys cash position, its net income as a percentage of sales, and its current liabilities to current assets position.

Results: Discuss the results regarding profitability of the first month of operations.

Consider how well the company is positioned to meet current liabilities.

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 months 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)?

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

Consider additional controls that will support the potential for adding merchandise and additional assets with business growth/expansion.

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.

Summary Report: Financial Statements 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 profitet 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.] Summary Report: Financial Statements Looking to the Future [In response to the owner's request for additional information and support for future growth, discuss accounting considerations associated with the acquisition of additional long term/fixed assets, and the addition of merchandise inventory. How will the company account for the costs of long-term assets? How will the method of depreciation be determined? (Expand on 2 different methods of depreciation to demonstrate ideal application). How does accounting change with the addition of merchandise inventory? How will it be determined which inventory costing method to apply? (Discuss how the FIFO, LIFO, and Average methods differ and provide examples of the types of merchandising scenarios that would be ideally applicable in each case.)] Summary Report: Financial Statements 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 profitet 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.] Summary Report: Financial Statements Looking to the Future [In response to the owner's request for additional information and support for future growth, discuss accounting considerations associated with the acquisition of additional long term/fixed assets, and the addition of merchandise inventory. How will the company account for the costs of long-term assets? How will the method of depreciation be determined? (Expand on 2 different methods of depreciation to demonstrate ideal application). How does accounting change with the addition of merchandise inventory? How will it be determined which inventory costing method to apply? (Discuss how the FIFO, LIFO, and Average methods differ and provide examples of the types of merchandising scenarios that would be ideally applicable in each case.)]