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Notes To Financial Statement

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Notes To Financial Statement

Uploaded by

shinamaev
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Bright-Bloom Designs

ABN: 12 345 678 901

NOTES TO THE FINANCIAL STATEMENTS


FOR THE YEAR ENDED 30 JUNE 2023

1. Statement of Significant Accounting Policies

The principal has prepared the financial statements on the basis


that the business is a non-reporting entity because there are no users
dependent on general-purpose financial statements. The financial
statements are therefore special-purpose financial statements that have
been prepared to meet the needs of the business owner.

The financial statements have been prepared in accordance with the


significant accounting policies disclosed below which the principal has
determined are appropriate to meet the needs of the business owner. Such
accounting policies are consistent with the previous period unless stated
otherwise.

The financial statements have been prepared by applying the


accrual basis and going concern basis of accounting. They are based on
historical costs and do not take into account changing money values or,
except where specifically stated, current valuations of non-current assets.
The following specific accounting policies, which are consistent
with the previous period unless otherwise stated, have been adopted in the
preparation of these financial statements:

Revenue Recognition

Revenue is recognized when the significant risks and rewards of


ownership have been transferred to the buyer and can be measured
reliably. Net sales represent the total invoiced value of goods supplied to
customers during the year, excluding goods and services tax (GST).

Inventory

Inventory is measured at the lower of cost and net realizable value.


Cost is determined on a first-in, first-out basis and includes expenditure
incurred in acquiring the inventories and bringing them to their existing
location and condition.

Property, Plant, and Equipment

Property, plant, and equipment are carried at cost, less any


accumulated depreciation and impairment losses. Depreciation is
calculated on a straight-line basis over the estimated useful life of the
assets.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and at banks, and other
short-term highly liquid investments with original maturities of three
months or less.

Accounts Receivable

Accounts receivable are recognized initially at fair value and


subsequently measured at amortized cost using the effective interest
method, less provision for impairment. An allowance for doubtful debts is
recognized when there is objective evidence that the business will not be
able to collect all amounts due according to the original terms of
receivables.
Accounts Payable

Accounts payable are recognized initially at fair value and


subsequently measured at amortized cost using the effective interest
method.

Provisions

Provisions are recognized when the business has a present legal or


constructive obligation as a result of past events, it is probable that an
outflow of resources embodying economic benefits will be required to
settle the obligation, and a reliable estimate of the amount of the
obligation can be made.
Financial Statements Overview

Income Statements

The income statements for the years ended December 31, 2021, 2022, and
2023 are as follows:

Income Statement for the Year Ended December 31, 2021

 Net Sales: ₱240,450


 Cost of Goods Sold: ₱182,000
 Gross Income: ₱58,450
 Total Expenses: ₱66,900
 Net Income Before Taxes: ₱21,550
 Income Taxes: ₱6,465
 Net Income After Taxes: ₱15,085

Income Statement for the Year Ended December 31, 2022

 Net Sales: ₱425,940


 Cost of Goods Sold: ₱318,060
 Gross Income: ₱107,880
 Total Expenses: ₱87,900
 Net Income Before Taxes: ₱50,980
 Income Taxes: ₱15,294
 Net Income After Taxes: ₱35,686

Income Statement for the Year Ended December 31, 2023

 Net Sales: ₱592,194


 Cost of Goods Sold: ₱442,206
 Gross Income: ₱149,988
 Total Expenses: ₱113,100
 Net Income Before Taxes: ₱66,888
 Income Taxes: ₱20,066.40
 Net Income After Taxes: ₱46,821.60

Balance Sheets

The balance sheets for the years ended December 31, 2021, 2022, and
2023 are as follows:

Balance Sheet for the Year Ended December 31, 2021


 Total Assets: ₱362,000
 Total Liabilities: ₱182,000
 Total Equity: ₱180,000

Balance Sheet for the Year Ended December 31, 2022

 Total Assets: ₱626,920


 Total Liabilities: ₱318,060
 Total Equity: ₱308,860

Balance Sheet for the Year Ended December 31, 2023

 Total Assets: ₱859,082


 Total Liabilities: ₱442,206
 Total Equity: ₱416,876

Cash Flow Statements

The cash flow statements for the years 2021, 2022, and 2023 are as
follows:

Cash Flow Statement for January 2021 - December 2021

 Total Revenues: ₱240,450


 Total Expenses: ₱218,900
 Total Cash Flow: ₱21,550

Cash Flow Statement for January 2022 - December 2022

 Total Revenues: ₱425,940


 Total Expenses: ₱374,960
 Total Cash Flow: ₱50,980

Cash Flow Statement for January 2023 - December 2023

 Total Revenues: ₱592,194


 Total Expenses: ₱525,306
 Total Cash Flow: ₱66,888

These notes are to be read in conjunction with the attached compilation


report.

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