Advantages And Tools Of Spreadsheet For Calculation And Accounting

Naming Cells in Spreadsheet

In spreadsheet, there is a tool to change the cell references by any name according to the user to make it easier and quite useful for the user. Through this naming, it becomes easy for the user to apply formula (Stratton, SAS Institute Inc., 2009). This reduces the chances of error in the calculation. This tools helps the user in auditing, managing, updating and administrating the calculations in a well manner. It also help the user to calculate all the values and accounting values easily. Below are few examples of naming cells through which naming cells in the spreadsheet could easily be understood:

Example Type	Example with no name	Example with a name
Table Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	C4:G36	=TopSales06
Constant	=Product(C5, 8.3)	=Product(Price, WASalesTax)

Negative numbers in the accounting and financial report of a company could be shown by the accountant in the spreadsheet either in red color, with minus sign or in the brackets. Negative numbers are the credit amount. For showing the negative numbers in the reports, accountant prefers to use brackets as the brackets make the calculation easy and it makes the report attractive (Snyder and Davenport, 2013). Negative numbers are quite easy to find it too.

Report and spreadsheet is important tool for an accountant or other users to depict the right information to the reader. Accountants always make different report and spreadsheet to make the statement and describe and interpret about the report. Spreadsheet helps the accountant to calculate and make better statement quickly and the report is made for interpreting those statements (Hoque, 2002).

A separate report and spreadsheet is helpful for all the users whether they are internal user or external users to make the financial statement or interpret them in a proper manner.

 The IF function is the tool of spreadsheet which is used by the user for analyzing and calculating some logical calculations. This function is used by all the users for get some logical answers. This function helps the user to get different answers in different situation. Following is the example of IF function:

IF (Something is False, then do this, otherwise do something else).

Tendulkar Manufacturing Company
Income Statement
For the year ended 30 September, 2017
Particular	Amount ($)
Sales	=1700000-4000
Cost of goods sold	=D10
Salary	100000
Accrued Salary	700
General expenses	23000
Audit Fee	3000
Advertisement	12000
Light and Power	12000
Cartage Outwards	5000
Insurance	=(4000*0.25)-(1000*0.25)
Rates	=9000*0.25
Sales Commission	40000
Tax	50000
Discount	6000

Tendulkar Manufacturing Company
Income Statement
For the year ended 30 September, 2017
Particular	Amount ($)
Sales	254700
Salary	100000
Accrued Salary	700
General expenses	23000
Audit Fee	3000
Advertisement	12000
Light and Power	12000
Cartage Outwards	5000
Insurance	750
Rates	2250
Sales Commission	40000
Tax	50000
Discount	6000

Inventory of a company is managed by company through 2 system i.e. Perpetual and periodic inventory systems. These help the company to manage the records of inventory. Perpetual system helps the company to maintain the records at the time of transaction whereas periodic inventory system helps the company to maintain the record at the end of a specific period (Davies and Crawford, 2011). Perpetual inventory is the common inventory system.  

Negative Numbers in Accounting and Financial Reports

Transactions:
Beginning inventory	(1000 units at $ 15 each)	15000
Purchase	(900 units at $ 15 each)	13500
Sales	(1300 units at $ 18 each)	23400
Ending inventory	(600 units at $ 15 each)	9000

	Increase	Balance
Date	No of units	Unit cost	Total cost	No of units	Unit cost	Total cost
Apr-05	900	15	13500	1000	15	28500

Periodic inventory system:
Particular	Amount ($)	Particular	Amount ($)
Balance b/d	15000	Sales	23400
Purchase	13500	Closing stock	9000

This report has been prepared to analyze the advantages of spreadsheet. In first step, introduction of the report has been given. More, the advantages has been discussed and than conclusion part has been given.This report has been prepared to analyze the advantages and disadvantages of spreadsheet. It offers the information to the managers to use the spreadsheet for allocating the different cost to the different department and different cost center.

Spreadsheet is software which is used by accountant or user to get accurate calculations. This spreadsheet help the accountant to bifurcate different expenses occurred in different situation (Garrison et al, 2010). Many tools and formulas are consisted in Spreadsheet to prepare the accounts and make accurate calculations.

Conclusion:

Through the report it could be said that spreadsheet become essential now days for analyzing the financial data and get accurate result.

Fancy Footwear
Trial balance	Debit
Cash	12450
Accounts receivable	17650
Inventory	56980
Supplies	7560
Buildings	145000
Furniture	23780
Drawings	4590
Sales discount	3450
Sales returns and allowances	3430
Purchase	89700
Selling expenses	23700
General expenses	14500
Total	402790

Fancy Footwear
Trial balance	Debit
Cash	12450
Accounts receivable	17650
Inventory	56980
Supplies	7560
Buildings	145000
Furniture	23780
Drawings	4590
Sales revenue
Sales discount	3450
Sales returns and allowances	3430
Purchase	89700
Selling expenses	23700
Supplies expenses	=2400*2/3
Depreciation on building	=4000/2
Depreciation on furniture	=3700/2
General expenses	14500
Supplies expenses	=2400*1/3
Depreciation on building	=4000/2
Depreciation on furniture	=3700/2
Suspense	=(J40-I40)
Total	=SUM(I7:I38)-I30-I31-I32-I35-I36-I37

Fancy Footwear
Trial balance	Debit
Cash	12450
Inventory	56980
Supplies	7560
Buildings	145000
Furniture	23780
Drawings	4590
Sales discount	3450
Sales returns and allowances	5030
Purchase	93700
Selling expenses	23700
Supplies expenses	1600
Depreciation on building	2000
Depreciation on furniture	1850
General expenses	14500
Supplies expenses	800
Depreciation on building	2000
Depreciation on furniture	1850
Total	412390

Fancy Footwear
Trial balance	Debit
Cash	12450
Accounts receivable	=17650+4000
Inventory	56980
Supplies	7560
Buildings	145000
Furniture	23780
Drawings	4590
Sales discount	3450
Sales returns and allowances	=3430+1600
Purchase	=89700+4000
Selling expenses	23700
Supplies expenses	=2400*2/3
Depreciation on building	=4000/2
Depreciation on furniture	=3700/2
General expenses	14500
Supplies expenses	=2400*1/3
Depreciation on building	=4000/2
Depreciation on furniture	=3700/2
Total	=SUM(N7:N38)-N30-N31-N32-N35-N36-N37

Bank balance on April 30	18430
EFT Rent receipt	-500
EFT Insurance payment	200
NSF Cheque from customer	-900
Note receivable	-1600
Bank error Cheque 1419	630
Bank service charges	30
Deposit in transit	-2160
Cheque num 1420	1450
Cheque num 1421	800
Cheque num 1422	660
Cash account balance as of 30 April	17040

Bank balance on April 30	18430
EFT Rent receipt	=-500+200
EFT Insurance payment	=200+1000
NSF Cheque from customer	=-900-200
Note receivable	=-1600+500
Bank error Cheque 1419	=630-500
Bank service charges	30
Deposit in transit	=-2160-1000
Cheque num 1420	=1450+500
Cheque num 1421	=800-200
Cheque num 1422	=660-300
Cash account balance as of 30 April	=SUM(B5:B17)

Debts which could not be recovered by the company is known as bad debts. Bad debts could be estimated through following ways:

1. % of sales method:

This method considers the income statement. Uncollectible sales are calculated to estimate the bad debts.

Bad debts= Net sales (Total or credit)*% estimated as uncollectible This method considers the financial statement. Allowances are calculated to estimate the bad debts (Gapenski, 2008).

Bad debts= (account receivable closing balance* % estimated as uncollectible)- existing credit balance in allowances for doubtful debts+ existing debit balance in allowances for doubtful debts

Firm’s financial position could be analyzed by the accountant, internal stakeholder, external stakeholder, investors etc by considering the financial statement of the company. For analyzing the performance of the company final financial statements, ratio analysis etc has been done. Accounts receivable in also a way to analyze the financial position of company.

The analysis over account receivable helps the stakeholders into analyzing the solvency position of firm. Accounts receivable is floppy in nature so it becomes quite compulsory for stakeholders to analyze the position (Hillier, Grinblatt and Titman, 2011). Accounts receivable analysis helps the company to reduce the working capital level and thus the current cost of the company could also be reduced.

Dishonor of note receivable is a transaction where the note receivable given by the debtors to the company get dishonor and company fails to recover the amount from that note receivable (Dixon and Monk, 2009).

Analysis over ABC Company depicts that company makes 75% of its sell on credit basis and rest on cash basis. Current sale of the company is $ 10000. So credit amount is $7500. A note receivable has been given by debtors to Company and it has accepted by company and deposited into bank. In bank $4000 gets dishonored from total amount (Weygandt, Kimmel & Kieso, 2015).

Entry:

Note receivable account
Debtors	7500	Bank	7500
dishonour	4000	Balance c/d	4000

References

Bromwich, M. and Bhimani, A., (2005). Management accounting: Pathways to progress. Cima publishing.

Davies, T. and Crawford, I., (2011). Business accounting and finance. Pearson.

Dixon, A.D. and Monk, A.H., (2009). The power of finance: accounting harmonization’s effect on pension provision. Journal of Economic Geography, 9(5), pp.619-639.

Gapenski, L.C., (2008). Healthcare finance: an introduction to accounting and financial management. Health Administration Press.

Garrison, R. H., Noreen, E. W., Brewer, P. C., & McGowan, A. (2010). Managerial accounting. Issues in Accounting Education, 25(4), 792-793.

Hansen, D., Mowen, M. and Guan, L., (2007). Cost management: accounting and control. Cengage Learning.

Hillier, D., Grinblatt, M. and Titman, S., (2011). Financial markets and corporate strategy. McGraw Hill.

Hoque, Z., (2002). Strategic management accounting. Spiro Press.

Snyder, H. and Davenport, E., (2013). What does it really cost? Allocating indirect costs. Asian Libraries.

Stratton, A.J., SAS Institute Inc., 2009. Systems and methods for costing reciprocal relationships. U.S. Patent 7,634,431.

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2015). Financial & Managerial Accounting. John Wiley & Sons.