Precision Corporation was organized on January 1, 2018. At the end of 2018, the company had not

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Precision Corporation was organized on January 1, 2018. At the end of 2018, the company had not yet employed an accountant; however, an employee who was ?good with numbers? prepared the following statements at that date:

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* Cash equivalents are short-term investments readily convertible to cash whose value is unlikely to change.

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Required:

1. List all deficiencies that you can identify in these statements. Give a brief explanation of each one.

2. Prepare a proper income statement (correct net income is $32,250 and income tax expense is $10,750) and balance sheet (correct total assets are $140,000).

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Financial Accounting

ISBN: 978-1259964947

10th edition

Authors: Robert Libby, Patricia Libby, Frank Hodge

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