Coughlan has developed plans to expand into the wholesale flower marketrnand is in the process of negotiating a bank loan to finance the expansion. The bank is requesting 2019 financial statements prepared on the accrual basis of accounting from Coughlan. During the course of a review engagement of Coughlan, your firm, obtained the following information:                                                      
1). Amounts due from customers totaled $142,000 at 12/31/2019. During the year the company wrote off $7,400 of receivables that were deemed to be uncollectible.  An analysis of the receivables revealed that an estimated 3% of the balance will probably not be collected in 2020. There were no uncollectable receivables estimated at 12/31/2018.            

2). On May 1, 2019, Coughlan paid $7,800 to renew its comprehensive insurance coverage for one year. The premium on the previous one-year policy, which expired on April 30, 2019, was $6,900.

3). During 2019, Coughlan redid the parking lot at their North retail store. Coughlan paved and fenced in the lot at a cost of $50,000. The improvements were completed on July 2, 2019, and have an estimated useful life of 10 years. Depreciation on furniture and fixtures was $15,000 for 2019.  

4). Coughlan is being sued for $100,000. Coughlan's attorney believes that an unfavorable outcome is reasonably possible and that the best estimate of liability is $65,000.                              
5). All employees are paid weekly on Friday. The average payroll is $3,000 (6 day work week) per week. Employees were last paid on Friday, December 27th, 2019 for the week ended December 21st.  Although the employees did not work on Christmas Day, Coughlan pays them for the day.

6). Coughlan has made estimated tax payments of $10,000 per quarter for the first three quarters of 2019. Coughlan's estimated tax rate is 25%.    

7). Coughlan took out a 2 year note payable on April 1, 2019. The note bears interest at 3%. Principal and interest are due at maturity.

8). The company had two locations and due to poor performance, they decided to discontinue operations related to the south location.  This did not result in a strategic shift for Coughlan's operations.   The revenue for this location (which is included in the above trial balance) amounted to $83,000 and the expenses, $91,000 (purchases $50,000, salaries $26,000 and rent $15,000). The company disposed of all assets of the south location for a loss of $10,000 ($31,000 original cost with accumulated depreciation of $17,000). The company did not yet record the disposal of their assets.

9). The investments account is comprised of two investments.  One $100,000 bond was purchased at face value and Coughlan intends to hold until it matures. The interest on these bonds are 3% and is paid annually on January 31. Coughlan purchased these bonds on September 1st of the current year. The fair value of these bonds are $96,000. The other investment are shares of Google stock, which were purchased for $1,197/share. Assume the closing price of Google on 12/31/19, was $1,336/share.
Required:                                                          
a). Using the information provided, prepare a 10-column worksheet for Coughlan Flowers for the year ended December 31, 2019.
b). Prepare a separate worksheet showing your adjusting entries.                              
c). Prepare accrual basis financial statements for 2019 to be presented to the bank. You should include a multiple step income statement, statement of retained earnings and a classified balance sheet. A statement of cash flow is not required.                            
Your final product should be of professional quality and worth the $9,800 engagement fee Coughlan is paying your firm for the 2019 review of their financials.