Chem

CHEMALITE As pointed out by Mr. Larson, one of the stockholders for Chemalite in the case, Chemalite had eaten into their currency account dropping it from $375,000 to $230,000 in six months. When Bennett Alexander reports to him at years end, he will overhear to fetch that their cash account dropped further to $113,000. This will surely do little to comfort Mr. Larson as their cash has been depleted withal more. To someone not familiar with managerial story, like Mr. Larson, this whitethorn be a cause for concern. However, to fully understand the billet of Chemalite, further analysis into their Assets, Liabilities, Share Holder rectitude, and the production of pick out financial documents (such as their balance sheet, income statement, and statement of cash flows) mustiness be completed. To carry out this analysis, we started off by creating ledger entries for each of the key 14 transactions that were executed during the accounting period (this work can be seen in addendum A). Then, these were converted to T-account entries that dealed their Asset, Liability and Share Holder Equity which could easily be converted into a template to track their balances in each of these accounts throughout the year (found in supplement B).

Finally, at this point, an income statement, statement of cash flows, and balance sheet could be produced for Chemalites first year in business, shown in supplement C. Through this analysis, the following was discovered, that Bennett Alexander should communicate to his investors in an endeavor to ease their concern of the Chemalite investors. Chemalites cash account on their balance sheet at year end represents a deceptive view of the general health and well macrocosm of the company. Although the companies cash balance did take a hit throughout the year, the reasoning can be attributed to financing cost that a company of its age is likely to encounter. Fortunately for Chemalites, these start-up costs have been journalized and realized,... If you want to get a full essay, order it on our website: Orderessay

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