As a CPA, you have been asked to prepare your sister Betty's year-end financial statements. Betty is a photographer and is the sole shareholder of a small company called Best Weddings Ltd. She photographs weddings, graduations, and schools, and earns about $75,000 per year. Betty has said that she only needs the financial statements for her tax returns and would like you to prepare the tax returns too.

Required:

A. Would you be able to prepare the financial statements for your sister? Why or why not?

B. If yes, what type of report would you prepare to accompany the financial statements?

C. Would you be able to prepare the tax returns for your sister? Why or why not?