Facts: Delia Alvarez, owner of Delias Lawn Service, wants to borrow money to buy new lawn equipment. A local bank has asked for financial statements. Alvarez has asked you to prepare financial statements for the year ended December 31, 20--. You have been given the unadjusted trial balance (shown below) and suspect that Alvarez expects you to base your statements on this information. You are concerned, however, that some of the account balances may need to be adjusted. Write a memo to Alvarez explaining what additional information you need before you can prepare the financial statements. Alvarez is not familiar with accounting issues. Therefore, explain in your memo why you need this information, the potential impact of this information on the financial statements, and the importance of making these adjustments before approaching the bank for a loan.

Write a minimum 3 paragraph, grammatically correct, business memo to Alvarez explaining what additional information you need before you can prepare the financial statements. Alvarez is not familiar with accounting issues; therefore, explain in your memo the following (use each item required as a paragraph within your response memo to Alvarez): Why you need this information. The potential impact of this information on the financial statements. The importance of making these adjustments before approaching the bank for a loan.

Delia's Lawn Service Trial Balance December 31, 20-- ACCOUNTTILE IBITBALANCE CREDIT BALANG 101 Cash Accounts Receivable Supplies Prepaid Insurance Lawn Equipment Accounts Payable Delia Alvarez, Capital Delia Alvarez, Drawing Lawn Cutting Fees Wages Expense Rent Expense Gas and Oil Expense 17 000 170000 28 000 40 000 13 80 000 122 142 145 183 202 311 312 2 20 000 300 000 35 000 401 52 40 000 511 521 35 8 50 00 120000 3 25 000 57 60 000 538 57 60 000