Interpretation of Financial Statements of a company


You are provided with basic financial information about a fictional company and are asked to prepare three financial statements for the company. You are then required to discuss the financial health and position of the organisation.

Below, you will find two important documents: the opening statement of financial position and a provisional trial balance for the fictional company.

Remember that the trial balance has been prepared at the end of the year, but note that the retained earnings and inventories balances included are still those figures relating to the start of that year. You can find the complete statements of finance in the Solution document.


  1. Using the above information, prepare an income statement for the company for the year to 31 December 2009.
  2. Prepare a statement of financial position for the company as at 31 December 2009.
  3. Prepare a cash flow statement for the company for the year to 31 December 2009, using the indirect method and in accordance with IAS 7.
  4. Discuss what inferences can be drawn from the above three statements in relation to the company’s financial position.


The question belongs to Accounting and it is about preparation of statement of accounts which include income statement, balance sheet and cash flow statement for a fictitious company. Apart from the preparation of the statements of accounts, an interpretation of the company has also been given in the solution.

Total Word Count 284


Download Full Solution


  • HWA

    this is a very good website

  • HWA

    I have 50 questions for the same test your page is showing only 28

  • HWA

    hi can you please help or guide me to answer my assignments. thanks

  • HWA

    hi can anyone help or guide me to my assignments. thanks

  • HWA

  • HWA

    This solution is perfect ...thanks

  • HWA

    Hello Allison,I love the 2nd image that you did! I also, had never heard of SumoPaint, is something that I will have to exolpre a bit! I understand completely the 52 (or so) youtube videos that you probably watched. Sometimes they have what you want, sometimes they don't! However, it is always satisfying when you are able to produce something that you have taught yourself. Great job!Debra 0 likes

  • HWA

    Perfect bank of solution. 

  • HWA

    great !

  • HWA
    Paul Brandon-Fritzius

    thanks for the quick response. the solution looks good. :)

  • HWA
    tina Johnson

    thnx for the answer. it was perfect. just the way i wanted it. 

  • HWA

    works fine.