ACCT11081 INTRODUCTORY FINANCIAL ACCOUNTINGASSIGNMENT

By Angela Engelbrecht -12048737Blog: My Accounting JourneyMoodle: Angela Engelbrecht

STEP 3

My company

The company I have been given is Aluminium Bahrain B.S.C.

Aluminium Bahrain WebsiteAnnual Report 2014Annual Report 2015Annual Report 2016

I was initially overwhelmed when I saw my company was an aluminium smelter because I know nothing about the industry. I was even more overwhelmed that it is in Bahrain and it trades in Bahrain dinar. Where and what the heck is that? I then remembered my anxiety when I received a UK construction company, Bellway, in ACCT11059, and I remembered how much I enjoyed researching that company through the assignment.

Aluminium Bahrain is in Bahrain in the Middle East. The Kingdom of Bahrain is an island in the Persian Gulf just North of Qatar and 25km off the North East coast of Saudi Arabia. It is connected to Saudi Arabia by a 25 kilometre long bridge. Bahrain has a high human development index and was recognised by the World Bank as a high income economy. Bahrain’s currency is the Bahrain dinar (BHD) and 1BHD is equal to 3.14AUD so the currency is quite strong.

Aluminium Bahrain, or Alba as they call themselves, is an aluminium smelter company. This means they extract aluminium from its oxide, alumina, and then they make products out of the aluminium which they sell to downstream industries. Downstream industries, for those of us that are not aware, are industrial firms that process the output of other firms into a finished product. Alba produces billets, slabs, foundry, ingots and liquid

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aluminium from the aluminium they extract. Below are examples of the end products from Alba’s output;

Billets are sold to aluminium extrusion suppliers who use the versatile properties of aluminium alloys to create profiles in all shapes and sizes. They are used mainly in building applications like structural components and window frames.

Slabs are cast in rolling mills to produce foil stock which is then re-rolled into household foil or packaging materials used mainly by pharmaceutical industries. Other types of slabs are rolled into plates or sheets for use in general engineering and building industries.

Foundry alloys are used by automotive components manufacturers to cast wheels and engine blocks.

Standard Ingots are re-melted and then cast into various products used in the construction industry, transportation, electrical goods and household appliances to name a few.

Liquid molten metal is sold primarily to Midal Cables, one of the world’s leading cable and rod manufacturers. The liquid takes around 5 hours to solidify and can be transported to customers near Alba who can then cast their products directly without having to re-melt the aluminium.

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I found Alba’s annual report to be very informative and easy to read. I feel like they are quite transparent and aim to show honesty and integrity to their stakeholders. The company started in 1968 with the first production in 1971 with a maximum capacity of 120,000 metric tonnes per annum. In 2016 they achieved a record setting year with a production of 971,420 metric tonnes. They appear to be very successful and are expanding to add a 6th pot line. This expansion is due to roll out its first production on 1st

January 2019. This additional pot line will bring their capacity to 1.5 million metric tonnes per annum, which will make them the largest single-site aluminium smelter in the world. They have also secured US$1.5 billion in financing to complete the line 6 expansion, which is the largest corporate loan in the history of Bahrain. This shows the trust the financers have in the company.

Alba’s sales in 2016 were BD669 million (US$1,704 million), down from US$ 1.993 million in 2015, and with a net profit of BD48 million (US$129 million), down from US$159 million in 2015. The downturn in sales from 2015 to 2016 is due to lower LME (London Metal Exchange) prices and premium prices, and the price of aluminium fell in 2016 due to global uncertainty.

Key challenges Alba faces;

Volatile LME prices High US interest rates Chinese over production Competition Rising costs

Other risks and uncertainties Alba faces;

Price of Aluminium Health, safety, security and environmental risks Loss of either of their two largest customers Disruption to supply chain Natural gas supply at competitive rates

Alba is very proactive in regards to employee happiness and safety. ‘I remain grateful to my fellow Board of Directors for their able and dynamic

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leadership in supporting Alba in our long-term success. I, also, express my appreciation to Alba’s Management Team for their commitment towards developing Alba from within and steering the Company to a better and stronger position. Most importantly, I thank our employees who have transformed challenges into opportunities and made Alba what it is today.’ Daij bin Salman bin Daij Al Khalifa Chairman of the Board in the 2016 annual report.

Safety, health and environment are very important to them and they believe that continual improvement in safety is a key advantage over their competitors. This is because safety is the key to a good working culture and a profitable business. More safety equals less accidents and less down time. They also believe that their focus on managing costs through their ongoing initiatives is keeping them one step ahead of the competition. They invest in their people and they train and upskill their employees to further their financial success. Showing their commitment to health and safety, here (health & safety achievement) is a media release of an announcement that Alba reached 5 million hours at their Casthouse without any LTI (Lost Time Injury). They consider this a significant accomplishment as they have been working on Tomorrowland, a safety initiative, and they invest a lot of effort into their safety policies. They are continually improving and developing to ensure they come out on top in a volatile industry. In 2016 global demand for aluminium consumption was at a record high at 59.6 million metric tonnes and the world production was at 58.9 million metric tonnes which is looking good for Alba and its future. They also believe that the global demand for aluminium is expected to grow.

In 2017 there have been articles in the media about China’s illegal output and Beijing’s noxious smog. China has a limit on capacity because of environmental protection and air pollution control, and has allegedly been overstepping that capacity. There has also been talk of a third of China’s capacity being cut during the winter heating season, which starts in November, to ease the air pollution problem. This talk has forced the price of aluminium to go up. I have included some media links below and the effects this has had on aluminium price. It will be interesting to see Alba’s annual report for 2017 to see what impact this had on the company.

Article - Chinese Aluminium Smelters - February 2017Article - Chinese Aluminium Smelters - July 2017Article - Chinese Aluminium Smelters - August 2017

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In November this year in the media there was an article about Cracks Open in Aluminium Raw Materials Supply Chain. They are still trying to assess what impact the Chinese shutdowns will have on the aluminium market and production. On the LME aluminium was trading as high as US$2,215/tonne, which is considerably higher than the ~US$1,700 of November 2016. Alumina and carbon anode have both jumped in price and that is a concern. Alumina has increased 50% in price in the past year and aluminium has only increased 25% in price. There has also been a change in the pricing structure. Previously the volatility in the alumina price was not a concern for smelters because most of them had a supply contract linking the price to that of primary aluminium. It was like a natural hedge. Now that hedge is gone because the link between alumina and primary aluminium is no longer there and a price index is being used instead, although no pricing structure has been agreed on yet. Carbon anode, produced from petroleum coke, is necessary in the extracting process and there is no alternative at the moment. The supply of carbon anode is also being disrupted by China’s winter shutdown because China is the main supplier of petroleum coke, and it is believed that supply will run out. It is all very much up in the air. It’s all very exciting!

There is also talk in the media about America imposing import duties on aluminium. The US is conducting an investigation into aluminium imports, mainly from China. This could impact the aluminium suppliers as well as downstream industries in the US. The outcome on whether or not the duty will be imposed is yet to be decided. US Import Duties on Aluminium -

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November 2017 . So much is happening in the aluminium industry at the moment.

In October of this year Alba released their third quarter reports, Q3 Results - October 2017 and reported an increase in sales for 2017 which they attribute to a comeback in the global aluminium market. They have reported a 35% increase in sales in the third quarter from last year and net income is up 80% from the third quarter last year. As they predicted the global demand for aluminium is growing and as far as I can see all the uncertainty is not impacting them right now.

Alba’s financial statements look similar to Bellway’s, the company I had in ACCT11059. Some of the statements are called different names and there are only the consolidated financial statements, no company statements, but the layout looks very similar. Their Statement of Comprehensive Income is quite short. They show sales & cost of sales and then a few other income and expense items and then tax expense. That is it. I did notice their sales increased from 2013 to 2014 and then slightly decreased through 2015 and 2016, the same with their profit, as we can see in the graph below. They attribute this to the price of aluminium. The volatility of the cost of alumina and the price of aluminium must make it difficult for this company to keep the operating profits constant.

2013 2014 2015 20160

200,000

400,000

600,000

800,000

Sales, Cost of Sales and Profit for the past 4 years

BD'000

Sales Cost Of Sales Profit

We can also see from the profitability ratios below that their return on assets has decreased since 2014 and their net profit margin has decreased too.

201 2015 2014 2013

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Net Profit Margin Net profit after tax/sales7.2

% 7.8% 11.7% 10.6%

Return on Assets Net profit after tax/total assets4.1

% 5.1% 8.3% 6.8%

I thought it would be beneficial to work out their financial structure ratios as the company has many assets and I was interested to see how it looked. I was happy to find out that they look to be in a very good financial position. The debt/equity ratio compares the debt to the equity and Alba does not have much in the way of liabilities compared to their assets. Their equity ratio shows how much of the company is being funded by its investors and according to the figures below that is a considerable amount, which is good too. Alba’s debt ratio, debt to assets, is very low showing the company does not have a lot of debt in comparison to its assets. Although their net profit margin has decreased slightly, their financial position is better.

2016 2015 2014 2013Debt/Equity Ratio Debt/equity 18.8% 24.8% 26.5% 35.7%Equity Ratio Equity/total assets 84.2% 80.2% 79.0% 73.7%Debt Ratio 15.8% 19.8% 21.0% 26.3%

Alba’s assets are made up of property, plant and equipment. This comprises of land and buildings, a power generator plant, other equipment and assets in the process of completion. There is also inventory, trade and other receivables and bank balances and cash. They have other income amongst which is sale of water. It is interesting to note that because they have their own seawater desalination plant, they use their own water and sell it too. They also have their own petroleum coke calciner plant where they make their own coke needed in the production of aluminium. Alba is one of only two aluminium smelters with their own caliner. Their liabilities are made up of borrowings, employee’s end of service benefits and trade and other payables. I am happy to note they have depreciation and inventories in their financial statements.

I am happy we received a different company to the one we had in ACCT11059 because it means I have the opportunity to research a new company instead of working with the same one. I enjoy the process of finding information about my company. I am also happy I got Aluminium Bahrain and I was quite excited while I was researching this company. I even thought I wouldn’t mind working there. I had to stop myself from looking further so that I could concentrate on the other steps of this assignment because I could have researched this company and its industry

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forever. I am enjoying this company a lot more than the one I had in ACCT11059 because I have been in the building industry for 14 years now and although every company is different, I felt Bellway was a lot of the same thing I do every day. Aluminium Bahrain is so far from what I know and what I am used to and I believe that is why I feel so much more excited about this company. They seem to be very successful and proactive. The CEO, Tim Murry, quoted “Together if we Believe it, We Can Achieve it” in the 2016 Annual Report, which sums up what they are about and their strategy.

Discussions with others in our unit

Melissa De Rossi and I had a great discussion about our companies.

Angela – Blue Melissa-Grey

A G Barrs annual report looks like a very long advertisement. There are not many similarities I can see between them and Aluminium Bahrain. I feel like the annual reports for Aluminium Bahrain are much more straight forward and the format is superior. Our companies are so different - soft drinks and aluminium. The company I had for ACCT11059 was Monadelphous and it is somewhat similar. They are an Australian company providing engineering and maintenance services on a large scale. E.g. Infrastructure and mining. One thing I noticed that was similar to Monadelphous was the commitment to safety. Something you mentioned was the strong currency (BHD). A.G. Barr is located in the United Kingdom, and I found an article explaining that due to a drop in the value of the GBP, they would have to increase prices. They had already restructured and this was their next option. They are also tackling a new tax on sugar that will be implemented in 2018. They have been reducing the amount of sugar in their drinks, which brings the drinks into a lower tax bracket, meaning there will be a smaller increase in price. Is your company facing any challenges at the moment? did see the reduced sugar in the annual report. I wonder if they are reducing the sugar because of taxes alone or if they are concerned about the health risks of consuming so much sugar. My company in ACCT11059 was a UK company, Bellway. They were a building company and I did enjoy researching them but I am very happy to have a different company this time round. I found Aluminium Bahrian so much more interesting (maybe because I work for a building company here in Bundaberg and something different is more challenging for me). I also found Alba's reports very straightforward and professional. I think AG Barr's reports look professional too but they are very much geared for the investor. I love the way Alba are so focused on their people and the community. They are facing a few challenges at the moment. The alumina and aluminium prices are very volatile and there is a big problem with the Chinese over producing. I think I preferred Monadelphous simply because it is an Australian company and is a little more familiar to me. In fact, they recently completed a water treatment

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plant at Bargara. (I'm from Bundy too.) Monadelphous was also impacted by China in regards to steel prices and demand for their products. It is interesting to see how two different companies from relatively different industries (yet somewhat connected) can be impacted by just one country. I am enjoying the fact that I have an overseas company this time simply because I want to expand my understanding into a more global perspective. Different currencies and regions, different regulations, etc. I think it will be easier to understand exactly what A.G. Barr does simply because they make and sell soft drink. It seems a little more basic than the multiple services that Monadelphous provides. Also, I like your outside the box thinking in regards to the reasons for reducing sugar in the soft drinks. Is it really just about profits or do they care about the health of those who consume the product. I also enjoy the difference an overseas company presents. I have lived in many countries and travelled a lot before I came to Australia so the country the company is in does not bother me. As long as the reports are in English! A G Barr's financial statements are nicely presented and easy to read. I think both our companies are very similar in that respect. The financial reports are to the point. They seem to be making a decent profit.

I also had a great conversation with Makamas Silarat (Minty), on my blog, about the differences between our companies.

Hi Angela,wow what an effort. I love reading through your blog, very details which shows me how much effort you put into understanding your firm. I am very jealous because your firm looks so much more interesting than mine. The annual report is a lot more engaging and and fun to look at. My company is Cathay International Holding Ltd, which is a Hong Kong based investment company that has many subsidiary in the pharmaceutical industry. Another interesting point I have notice from reading your financial report is that it has emphasise on training and development of its staffs. However, my financial report doesn’t have many information regarding training and development of its staffs like most other firm’s statement. My financial report is mainly focusing on its performance review and its subsidiary. Please have a read through my blog and leave some feedback of what you know and don’t understand about my company. As well as if you would be able to answer some of the questions that I have for my Regards, Minty.

Thank you Minty. I really did enjoy researching Alumnium Alba. I also noticed how much they focus on their staff and they believe that is why they are so successful. I am going to head over to your blog now and have a look at your company and we can compare them after I have had a look.Angela

Hi Mintyfor some reason I can’t put a comment on your blog as it won’t let me publish my comment. We can discuss our companies here though.Pharmaceuticals, healthcare and hotels. A strange combination. Your company is interesting, I must say. The annual report is very long and not very exciting and they have a lot of information about the products and reasons why they are not performing well. If I was a stakeholder in this company, I guess that is information that I would want to know because the group of companies is showing a loss. They seem to think that they have spent what they have to and now things are going to start looking up for them. I hope they are right because I wonder how long they can keep losing money and still stay in business. I was shocked to see in the Income Statement that they spend 26% of their revenue on selling and distribution costs and another 24% on administrative expenses. Those two use up half their income! They do seem to have enough assets to cover their liabilities at this stage though. Another thing I noticed is that their retained earnings balance is -62 million. I am sure the shareholders would love this company to turn around soon and start making a profit.The main difference I noticed between your company annual report and mine is that my company is making a profit and things look a lot more positive. They are concentrating on how to improve something that is already working where your company seems like they are trying to explain themselves. What do you think?

Hi Angela, I totally agree with you, Angela. What a wonderful analysis. There are many things that you have noticed but I have clearly missed. Thank you for pointing out some of their massive spending for my company. I have yet to

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understand why they have spend so much when they clearly are not making enough profits. Yet, the company are taking some actions in the hope to turn this trouble around. Such action is to dispose of some of shares the company holds, and other measures such as diversification strategy by expanding into other areas of pharmaceutical includes healthcare and cosmeceutical products, in the hope to mitigate the business risks and improve profitability. I am not too sure how effective is their strategy, because more products means more costs. But we just got to hope and see what this company can do. Pharmaceutical, healthcare and hotels is an odd combination, I wonder if that is part of their strategic plans or is it because they’ll just invest in whatever in the hope to make profits? What do you think?I have mentioned earlier that your annual report is so much more comprehensive and interesting. The company have reported about their training and development programs, safety health and environment, and corporate social responsibility. Which is very common in most company’s annual report, however in my company annual report there seem to be missing. Even for my last company, LogiCamms, I remember they also these specific information in their annual report. I wonder why that is? I feel as though Cathay is more focused on profits, investment and shares rather than management. Or perhaps, because is the head of the Group, so the management structure does not fall under the same principal. May be they all have a separate annual report?Your company seems to be making so much profits when comparing to mine. Your Gross profit is 82,379,000 BHD which equals to 218,333,182.65 USD. That’s a massive difference in comparison to my company when the gross profit is only just 57,282,000 USD. It is so interesting to learn more about different company, as well as hearing other people point of view. p.s I think I have fixed my blog so it should be find to comments.Love to hear more from you. Kind regards, Minty.

Hi MintyI think Cathay need to do something to turn the company around. I would hope they are concentrating on the products they know they can make money out of in order to start making a profit. Then they can continue concentrating on other products that they may think will be profitable in the future. Maybe because they are running at a loss overall they think they need to concentrate more on profitability and products than on their employees and the community. You brought up some very interesting points above. Alba do seem to be doing very well. Their gross profit is down in 2016. In 2015 it was US$273 million and in 2016 it was US$218 million, The price of aluminium fell quite a bit in 2016. Cathay’s financial statement are fairly easy to read and they have been presented well for investors to understand what is going on in the company. They haven’t tried to put so much in to confuse interested parties. Are you happy with your firm or would you have preferred another firm?

STEP 4

Practicing the recording process

This step was so much fun and disheartening at the same time. I have always kept a budget because finances have always been tight for us. My mother lives with us and is completely financially dependent on us and we have two children who were in private schools but are now in university. I don’t have their university fees to pay as they have loans for that but I do have to support one at home with us and one in a different city because his degree is not available where we live. In order for me to know how we are tracking and how we are going to afford all the bills I have always maintained a budget spreadsheet for six months to a year in advance. This has been a great help to us, however I have never completed a month to month chart of accounts and income statement. I was shocked to see how much we are spending on certain areas and other areas were no surprise at all. I have fudged some of the figures for confidentiality, but I will definitely continue this practice on monthly bases to analyse our spending.

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a) What is the chart of accounts so far as illustrated in this example? What is your own chart of accounts?

The chart of accounts in the example is quite simple and straightforward. It is made up of the Revenue and Expenses. I am a little confused why the Revenue and Expenses are on top and the Assets, Liabilities and Equity are below but I assume it has been done this way because most of us will only utilise the Revenue and Expenses in our exercise. I guess it does not matter how your chart of accounts is set out as they do not have to abide by any regulation, and as long as you have all the accounting elements in there it should be done however it is easiest for the user. I have done mine the same way because I thought it would be a great exercise to do monthly, and I feel I am more likely to complete mine every month if I only have to tackle Revenue and Expenses in the beginning. I can then maybe add Assets, Liabilities and Equity at a later stage. My own chart of accounts is a little more detailed as I have broken my expenses down into more categories and I have also used sub-categories for my vehicle expenses and home loan expenses to show the different types of expenses in those categories. I would find it useful to know how much extra I am paying on my home loan and I will also find it useful to know how my vehicle expenses are split.

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b) What level of detail could you change in the chart of accounts shown in this activity? Why might you want to do this?

I could, and I probably will, change a lot of detail in my chart of accounts as I go from month to month and see what I want to get out of it and what information I feel I need to be able to see. The chart of accounts shown in this activity could be expanded to show a greater level of detail. The account 1-2 Income - salary and wages could be split up to show individual family members income so that they could see how much revenue each person is bringing in and the account 2-6 General Living Expenses (food, fuel) could be split up into individual accounts for fuel, groceries, takeout and any other items lumped together with food. The two mobile telephones could have their own accounts so see the totals over a period of time and the different credit cards could be split up into individual accounts. It all depends on what information the user wants to know. I personally would like to leave the 1-2 Income – salary and wages lumped together because that individual information is not relevant to me. I would however like to have a more detailed breakdown on 2-6 General Living Expenses to know where the money is being spent and what areas need to be cut back on in order to reduce the expenses.

c) How might you analyse your Income Statement? Has this exercise of recording your transactions through to the financial statements been useful for you? If so, why; if not, why not?

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The process of classifying my bank transactions and merging them into an Income Statement has enabled me to have a good look at the totals for the month for each account. I can see the percentages of expenses compared to income and analyse how this impacts my family and what we can do to change that impact. I can see from my Income Statement above that my home loan expenses are the biggest monthly expense, this is when adding my required payments and my extra payments. I thought my child expenses would be higher than my home loan expenses but that is not the case, although my child expenses are very high comprising 13.4% of our family income.

The big shock for me was my insurance expenses. I pay my insurances monthly but I do have one car which I pay yearly and that one was paid in September, which made our insurance very high for this month. I may, in future, accrue the expenses I pay yearly so that we can get a clearer picture of our monthly expenditure. In saying that, as long as I am aware that we had a yearly bill in a certain account in that month, I can assess that and get an idea of how that impacts us. I was happy to see entertainment was only 0.8% of our monthly income. I will use this account to record anything

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we do that I class as unnecessary or indulgent, like eating out or buying unnecessary items, so that I can monitor these.

I must admit I did enjoy completing this step and I will definitely be continuing it into the future. I can see the benefit of completing this monthly, and then yearly, to see where our income is being spent and to determine if and where we can make cutbacks to maximise our cash at bank balance and ultimately our equity. Completing this step was a bit of a shock to me and I think I will be making some changes in the future because of it. I am tempted to go back and do a monthly Income Statement for last year to see how we did so that I can have something to compare at the end of this year.

STEP 5

Creating a Trial Balance in a spreadsheet, using your company’s financial statements

Completing the Trial Balance for Aluminium Bahrain was a relatively straightforward process for me. I am fortunate that Alba’s financial reports are easy to read and very clearly set out. There is a clear distinction between Assets, Equity and Liabilities in the Balance Sheet and the Revenue and Expenses are clearly defined in the Income Statement. There are no group statements and company statements shown, making it easier when trying to decipher the financial statements.

I am proud to say that I completed the spreadsheet before watching the lecture. At first the Trial Balance would not balance and then I thought about the retained earnings and I thought about how the balance sheet has the retained earnings figure including the profit/loss for the year, therefore doubling up the Revenue and Expenses, and I realised I needed to take the Revenue and Expenses off the Retained Earnings figure in the Balance Sheet in order to reflect the profit/loss allocated at the end of year. This reinforced to me the fact that I understood the Retained Earnings process. I had questions in ACCT11059 about retained earnings and how it all linked together and I did some research back then which I think helped me in my understanding of this process. I understand that the Revenue and Expense accounts are temporary accounts which we use during the period to reflect the day to day operating activities in regards to sales, cost of sales and other income and expenses. At the end of the period we journal the Revenue

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and Expenses into a Profit/Loss account and then the balance remaining is journaled to Retained Earnings and the Revenue and Expense accounts start with a nil balance for the next period.

When completing the trial balance I realised the full impact of the link between the statements and how the Income Statement is linked to the Statement of Changes in Equity by the retained earnings and how the Balance Sheet is linked to the Statement of Changes in Equity by the retained earnings. The Statement of Changes in Equity seems to be the middle man here. I am eager to learn more about the Statement of Cash Flow and how it relates because that is one statement we have not touched on yet and I do not understand how it ties into the other statements.

I did not have to look too closely at the Statement of Changes in Equity when completing my trial balance as I did not have any other comprehensive income in my Income Statement. I did note that the Retained Earnings carried forward from 2015 was BD731,698,000 and my figure for the retained earnings in the trial balance was BD731,423,000. The difference was BD275,000, which was loss on resale of treasure shares (BD287,000) and excess of final dividend for 2015 reversed BD12,000. These were both closed off to retained earnings. I did not record these in my spreadsheet as they were not listed in the Income Statement. I do, however, understand why my retained earnings on my trial balance does not match my retained earnings brought forward from 2015 and this was because of the (BD287,000) and BD12,000 relating to capital contributions and dividends. When I took the total for retained earnings as shown on my Balance Sheet and added my revenue minus my expenses as per my Income Statement the difference was exactly my profit amount and I was happy with this.

Discussions with others in our unit

After discussions with others in the unit and after reading other students assignments, I have come to the realisation that financial statements can be quite different. While they all relay the same type of information they have a variety of different ways to do this. You can have two completely different types of companies and their financial statements can look quite similar and then you can have two companies that do the same thing and their financial statements can be quite different. One thing they all have in common is that the Revenue and Expenses are always closed off to the Retained Earnings in the Equity of the Balance Sheet via the profit/loss account.

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My discussion with Melissa De Rossi about completing the trial balance is below.

Angela – Blue Melissa-Grey

. How did you go with step 5? I enjoyed step 5 and found the excel part pretty straightforward. I did learn a lot about how the different financial statements link together. What about you? I have never done a trial balance before so that was new to me. I complete the accounts up to trial balance at work but have never taken too much notice of the trial balance and what it represents. I will be taking more notice from now on. I found the excel part mostly straight forward. The only bit that I had to think a bit about was where the other comprehensive income items closed off into. Afterwards one of the equity items ended up in a negative debit, so I ended up converting it into the credit column. I found it fascinating how the statements linked. Income and CI into equity, and then into the balance sheet. It really made me understand that you need all of them to understand the big picture. It was definitely a new experience for me and I quite enjoyed the number crunching. Alba don't have any other comprehensive income, lucky me. I also found it enjoyable. It has confirmed for me that I am going to enjoy accounting. Me too! Thanks for the chat Melissa, it's been great. I have to get up at 4am so I should finish off now. I will look out for your draft and complete a feedback form for you as I have already read some of your assignment and looked at your annual report. Good luck with the rest and will chat again soon. Thank you, you too. I will do the same for yours.

Melissa and I did not have too many complications when completing the trial balance spreadsheet. We did however confirm our love of number crunching and spreadsheets and the fact that we both think we will enjoy our accounting careers!

STEP 6

Feedback

Rachelle Eastaway was having some trouble with her step 5 spreadsheet. She posted it in the forum and on facebook and I had a look and helped her out with a few little mistakes she had made. Her response was priceless;

Thank you Thank you Thank you! I owe you one! it makes so much more sense now, i made so many little mistakes and it overall just created one big error. Thank you again, if you need me to have a look over your draft or anything please do not hesitate to send it through. Kind regards, Rachelle :) 

Helping others is so rewarding and I find I learn better that way. I gained a better understanding of how the statements link together by helping

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Rachelle because her financial statements were a little different to mine and a little more complicated and therefore it was not a repeat exercise but rather a new exercise for me.

Peer Feedback sheets to be inserted

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