Financial Statement Essay Example | Topics and Well Written Essays - 500 words

Financial Statement - Essay Example The vehicles are not a part of the operations for the next three years. The furniture and fixtures are depreciated at a useful life of five years. Equipments are depreciated at four years of useful life and building is also the part of the balance sheet for the first 3 years. The company will invest in buildings once the brand is known to the consumers. The account of reserves of bad debts are to be increased at the rate of five percent of the reserves of bad debt accounts of the previous year. The increase in the cash in hand, cash at bank and accounts receivable is estimated to increase with an average rate of five percent that are subjected to the projected estimates for the revenues. The projections of the sales of the company vary according to the seasonal changes due to which there is a fluctuation in the sales volume of the company on the basis of its monthly accounts. Looking at the cash flow of the company it can be noted that the company does not announced to pay off any of dividends or any additional cash against its current assets, borrowings or long-term assets. It can also be noted that the inflow of the cash relies on the sales of the company. Hence, it can be noted that the cash from the operations of the company and the outflow of the cash is mainly focused to the payments of the utilities, bills and cash spending (AASB 139 Financial instruments: recognition and measurement. 2014).   The company does not intend to create reserves for earnings or dividends to its shareholder.