How to Prepare Financial Statements Watch Video
Allan Madan, CPA, CA
In this article called, “How to Prepare Financial Statements”, Read More…
Disclaimer
The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.
ABOUT THE AUTHOR
ALLAN MADAN
CPA, CA
Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.
very good article
Thank you
– Allan
Hi Allan
Where do I download the Download the Spreadsheet for Financial Statement Preparation?
It’s back up on the blog. Sorry for the inconvenience caused.
Allan Madan, CPA, CA
Tel: 905-268-0150
Is there a link you can provide me with that would explain some of these terms in detail? I understand most of them but would require more detail on what exactly would be considered an asset and what would be considered an operating expense.
hey allan i cant find the the link to download the spreadsheet!
Hey Allan,
I cant find the link to download the spreadsheet?
Thank you Allan for this timely video and example – GIFI.
Hi Allan,
I can not find the link to download the spreadsheet ?
Thank you,
Tony
Hi Tony,
In the article there is two hyperlinked text “How to prepare financial statements” (first paragraph), and there is another hyperlinked text “expenses spreadsheet”. You can click on either link and it will download the spreadsheet.
How we got HST-paid = 1699?
Expenses = 13,906
13,906 * 0.13 = 1808
or I miss something ?
HI Allan,
Thanks for the blog. It’s very helpful. I have one question. Can I hire one of the shareholders as a contractor to build our website? Can I treat the contract amount as our expense? As the corp has no payroll for now.
Thanks.
Hi Mike,
You can do this so long as the individual shareholder is acting in the capacity of an independent contractor and not an employee. An independent contractor normally has more than one client, pays for his own expenses, makes his own decisions independently and provides his own tools and equipment.
Hi – I have a balance sheet question. When you start a new quickbooks pro file for an existing company, you have to enter all the opening balances. Unfortunately quickbooks dumps a lot of items into the “opening balance equity” account.
1. Quickbooks instructions say to do a journal entry to transfer the balance of that account to “owner’s equity”. Does that make sense?
2. I figured before I create a new account and do that, I should ensure I know which GIFI code will be attached to it for the income tax return. I looked at the list and maybe CRA lists “owner equity” by a different name?
Thanks so much for your blog and videos…I have learned so much from your site.
Hi Clair, my responses are as follows:
1. Yes, you have to make an adjusting journal entry to re-allocate the items in the opening equity account to the appropriate accounts.
2. Use GIFI code 3541 for owners equity.
much appreciated. The article has a clarity in it and very easily understandable
Hello, i am filing the return for my second year. During the first year of my statement of income, my accountant has only considered Revenue earned as total amount earned during year minus the total expenses for the Net income. It doesn’t have the tax payable amount shown on the income statement. This amount was considered as closing balance for last year. As i paid the taxes last year after closing my account, so what should be the opening balance for this year, should it be closing balance of last year or closing balance of last year minus taxes paid for last year
Hi Nitish, it appears that your accountant did not accrue income tax expense on the financial statements in the company’s first year of operations. The correct approach is to record an income tax liability on the Balance Sheet and an income tax expense on the Income Statement.
You can either amend last year’s financial statements and corporate tax return to correct the error, or leave the error as is and make sure that you follow the current approach from now on. I prefer the second approach. As such, in the current year (i.e. year 2), make sure that the income tax liability on the balance sheet is equal to the current income tax expense less tax installments paid.
Is the near future of the accounting profession going to produce work mainly through artificial intelligence? Is an acct degree still worth it? What other business degrees are worth achieving today? Is an undergraduate degree sufficiant? What software is necessary to master for todays accountant/Bk?
Hi Rocco, technology has made accounting easier, and will continue to automate functions that are performed by humans now. However, where complex tax advice and tax planning is concerned, I strongly believe personal, professional advice is required.
This video and others has helped me prepare my tax. I understand how the input of taxes owing for the current year on the balance sheet is required as it reflects the current years balance. Why is it that you do not need to show the payment of the previous years tax anywhere. Is this because it was already shown on last years balance sheet so that the income and balance all work out ?
Thanks
Hi Joe,
The payment of the previous year’s tax balance should be posted to the tax lability account on the balance sheet. The payment will reduce the balance owing / liability.