CP1-4 FINANCIAL REPORTING AND ANALYSIS CASE Using Pinancial Reports: Identifying and Correcting Deficiencies in a statem

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Cp1 4 Financial Reporting And Analysis Case Using Pinancial Reports Identifying And Correcting Deficiencies In A Statem 1 (48.43 KiB) Viewed 31 times

CP1-4 FINANCIAL REPORTING AND ANALYSIS CASE Using Pinancial Reports: Identifying and Correcting Deficiencies in a statement of Earnings and a Statement of Financial Position Performance Corporation was organited on January 1, 2000. At the end of 2020, the company had not yet employed an accountant; however, an employee who was "good with numbers prepared the following statements at that date Performance Corporation December 31, 2020 Income from sales of merchandise $175.000 Total amount ord for goods sold during 2020 190.000) Selling costs 125,000) Depreciation (on service vehicles used (10.000) Income from services rendered 52.000 Salaries and wages paid 162.000) Performance Corporation December 31, 2020 Resources Cash $ 32.000 Merchandise inventory theld for resale) 42,000 Service vehicles 50.000 Retained eamings net earnings of 2020) 30,000 Grand total $154,000 Debts Payable to suppliers $ 22.000 Note owed to bank 25,000 Due from customers 13.000 Total 60,000 Supplies on hand to be used in rendering services) $ 15,000 Accumulated depreciation (on service vehicles) 10.000 Contributed capital, 6,500 shares 65,000 Total 90,000 Grand total $150,000 Actum depreciation represents the cont seated to the used portion of the asset and should be subtracted from the asset balance each one Required: 1. Läst all of the deficiencies that you can identify in these statements. Give a brief explanation of 2. Prepare a proper statement of earnings for Performance Corporation for 2000 (correct net eamings is $30,000) and a proper statement of financial position at December 31, 2020 (correct total assets are $12.000) CRITICAL THINKING CASES CP1-5 Making Decisions as a Manager: Reporting the Assets and Liabilities of a Business Emmanuel Lucas owns and operates Emmanuel Shop (a sole proprietorship). An employee prepares a financial report for the business at each year-end. This report lists all of the resources (assets) owned by Emmanuel, including such personal items as the home he owns and occupies. It also lists all of the debts of the business, but not his personal debts.