Monthly Financial Accounting Report

Student Name

Institutional Affiliation

Student Course

Date
 1. Trial balance

Magic Meals

Trial Balance

For the Month Ended November 30th, 21XX

Accounts Debit Credit

Capital 6,748.00

Cash in Bank 3,750.00

Computer Equipment 4,897.00

Cooking Equipment 1,281.00

1,050.00
Accts. Pay- Computer Store
124.00
Accts. Pay.-Green Grocers
3,000.00
Withdrawals
6,500.00
Fees
75.00
Advertising Expense
1,244.00
Food Expense
175.00
Utilities Expense

14,422.00 14,422.00

2. An income statement
 Magic Meals

Income Statement

For the Month Ended November 30th, 21XX

Particulars Amount (in $)

Revenues (A)

Sales - Fees 6500

Total Revenue 6500

Expenses (B)

Advertising Expense 75.00

Food Expense 1,244.00

Utilities Expense 175.00

Total Expenses 1494

Net Income(A-B) 5006

3. A statement of changes in owner’s equity.

 Particulars Amount (in $)

Opening Capital 6,748.00

Less: Drawings (3,000.00)

Add: Net Income 5,006.00

Closing Capital 8,754.00

4. Magic Meals

Balance sheet as at November 30th, 21XX

Particulars Amount (in $)

Assets

Fixed Assets

Computer Equipment 4,897.00

Cooking Equipment 1,281.00

Total Fixed Assets 6,178.00

Current Assets

Cash at Bank 3,750.00

Total Assets 9,928.00

Liabilities and equity holders fund

Current Liabilities

Trade Payable
 Computer Store 1,050.00

Green Grocers 124.00

Total Liabilities 1,174.00

Capital 8,754.00

Total Stockholders’ equity and Liabilities 9,928.00

Instructions: Answer the following questions.

1. What are financial statements? Where does the preparation of financial statements

fall in the accounting cycle?

It is a written record of a company's business operations and financial performance. Stock

investors must be able to work with numbers and comprehend the financial statements of

the companies in which they are interested. Financial documents, such as the balance

sheet, income statement, and cash flow statement, must be understood and analyzed in

order to make informed investment decisions.

2. When does a net loss occur?

In cases where expenses are greater than revenues in a business, project, transaction, or

investment that results in a net loss. Net losses would appear on the income statement as

a negative net profit for businesses.

3. What information does a balance sheet report about a business?

 A balance sheet is a list of all of your business's assets and liabilities (what it owes) (what

the business owes). It would show you how much money you would have left over if you

sold all of your assets and paid off all of your liabilities at any particular moment in time

thus, it also displays 'owner equity'.

4. Discuss why Magical Meals has no accounts receivable

Some firms do not require accounts receivables since they get paid ahead. A liability,

such as "unearned revenue" or "prepaid revenue," is recorded instead of an accounts

receivable when the invoice is initiated and submitted to the client. According to

(Schroeder et al., 2019), it is common for the account balance to include outstanding

invoices from both the current and preceding periods. A firm that refuses to provide

consumer’s credit, meaning that all sales must be paid for in cash, has no accounts

receivable.

References

Schroeder, R. G., Clark, M. W., & Cathey, J. M. (2019). Financial accounting theory

and analysis: text and cases. John Wiley & Sons.