Business Analysis of a Lemonade Stand

The information illustrated from the journal, to the income statement, to the balance sheet discloses the original expenditures of the Lemonade stand's fixed assets and the accumulated financial loss transcribed over Season One, which includes six days of revenues and expenses, which shows the standard practices of accounting methods appearing on the journal, income statements, and balance sheet attached for the Lemonade stand. The accounting data format sets up a proportion of financial statements at any time the company wants to know how things stand in fiscal matters for the lemonade stand. For just about every company, a financial statement is prepared at some point in time of each calendar month, quarter, and annually reporting periods. For the purpose of the Lemonade stand, the financial statements will be prepared on the 6th day of the Season, which is the ending period and the close of business of the last day of the profit reporting period. So for all purposes of the Lemonade stand, the company's balance sheet should be in alignment with their income statement.

There are a couple formal practices for accounting systems or methods for keeping track of the Lemonade stand's financial state of affairs, which is called a cash and accrual basis accounting system. Cash basis accounting acknowledges transactions when the hard cash exchanges hands. A small business like the Lemonade stand with relatively few transactions each month can uses this system as well. For the purposes of the paper, the accrual basis accounting method was used to demonstrate the Lemonade stand position. Accrual basis accounting realizes income when it is earned and expenditures when they are incurred. Under the accrual method, a bill like the store ac...

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...method to have more than one pitcher. The pitchers were an unnecessary purchase from the standpoint of purchasing excessive amounts of equipment. From the perspective of revenues versus expenses, the Lemonade stance was profitable leaving a net income and profit from the beginning to the end of the reporting period. The accounts payable uses half of the owner's capital, which was useful because the money was cash invested to start the business, which decrease the amount of liabilities presented on the balance sheet. Overall, the Lemonade stand was successful. From day one to day three the ending store balances and cash balances continues to increase. On day four, the stand paid the store account dropping revenues for that day. On day five and six, the cash sales for those days picked up and the expenses decrease by 3 cents, which was minor but helpful with revenues.