It is July 15,2011 . You, a junior accountant at a small accounting firm, go over your notes from your afternoon meeting with Marco Douga. Marco came to your office looking for help with his business, Marco's Professional Print Shop Ltd. (MPP). Marco is the owner-manager of MPP, a copy and print shop located in Newville. He recently approached a bank for aloan.

At his last meeting with the bank, the bank manager indicated that the loan is almost approved and told Marco that he needed to examine MPP's 2010 financial statements. In your file, you have the following information:

Exhibit I: Summary notes of the discussion with Marco Douga Exhibit II: Income statement for the year ended December 31, 2010, and 2009, prepared by the client Your supervisor is eager to see a draft income statement for the year ended December 31, 2010, based on the information you have thus far.

Required:

1. Identify any areas of concern that you may have about the operation of the business, particularly the proper accounting for revenue and expenses, and the control of operations.

2. Prepare a revised income statement based on the information that you gathered during your meeting with Marco.

3. Identify the weaknesses in MPP's internal control of operations. What changes would you recommend? Explain.