Please solve the Hydromaint Year 2 truck schedule, tax schedule and complete all financial statements with 2 footnotes. You can use all files I have uploaded, so I believe that there is someone who can absolutely finish them.

I have no idea why direct and indirect cash flows are slightly different, so please let me know which one is correct for me to follow. I will put $40 on these questions.

Pledge sheet chart is the Excel file that you should use and give it to me based on this file called req_03_5y1b...

Since Year 2 solutions are not 100% completed, I want you to fill the spreadsheet out with no blanks. Thanks very much.

Hydromaint, Inc. Statement of Cash Flows For the years ending December 31, Cash Flows: Operating activities Net Income (Loss) Adjustments to reconcile earnings to cash flow Depreciation and amortization Increase in net accounts receivable Increase in supplies inventory Decrease (increase) in prepaid insurance Decrease (increase) in tax benefit net of valuation allowance Increase in deferred tax asset: current Increase in deferred tax liability: long-term Increase in accounts payable Increase (decrease) in wages payable Increase in interest payable Increase in income tax payable Increase in unearned revenue Net cash provided (used) by operations 20X2 197,555.00 20X1 (14,554.00) 67,000.00 (32,000.00) (2,430.00) 2,400.00 3,526.00 (22,200.00) 4,560.00 7,174.00 (5,120.00) 18,240.00 96,069.00 50,000.00 384,774.00 12,000.00 (72,000.00) (6,300.00) (2,600.00) (3,526.00) 15,900.00 13,100.00 (57,980.00) (327,120.00) (327,120.00) (35,000.00) (10,000.00) (45,000.00) Cash Flows: Financing activities Proceeds from note payable Proceeds from issuance of common stock Net cash provided by financing activities 288,000.00 288,000.00 105,000.00 105,000.00 Net Increase in cash 345,654.00 2,020.00 Cash Flows: Investing activities Purchase vehicles and retooling additions Purchase of equipment Purchase of license agreement Net cash used by investing activities Cash at beginning of year Cash at end of year Significant noncash transactions Common stock issued for license agreement Caoitalized interest incurred for vehicles 2,020.00 347,674.00 2,020.00 15,000.00 2,880.00 Academic Honesty Pledge for Year 2 of the BAM: Note that this pledge applies to all assignments completed for Year 2 of Hydromaint, regard asked to submit a signed statement with each assignment or not. Pledge: By signing my name below (submitting this work from my e-mail account), I am promising 1) The work I submit is my own, 2) I did not and will not give aid to others, 3) I will not share any information about the assignment with those who are completing it l 4) I will report any others that I observe violating these rules. By typing my name in the box below, I acknowledge my responsibilities as stated above an academically dishonest manner I will receive a failing grade in this class. Type your name in the above box as evidence of your agreement to the academic honesty pledge. Instructions for saving this docment under a new name: This document is read only. You will need to save it under a new name that identifies you and you financial statements that you are submitting, and the date of your submission; i.e. Team3Year2No the excel documents that you are submitting to be graded. 2 of Hydromaint, regardless of whether or not you are account), I am promising that: se who are completing it later, in subsequent BAM classes, bilities as stated above and I understand that if I act in an onesty pledge. e that identifies you and your teammates, the year of the Hydromaint mission; i.e. Team3Year2Nov122012. Also, please type your names on 164-07191 HYDROMAINT , INC. CHART OF ACCOUNTS DECEMBER 31, 20X2 ACCOUNT NAME CASH ACCOUNTS RECEIVABLE ACCOUNTS RECEIVABLE- PROG BILLINGS ALLOWANCE FOR BAD DEBTS EQUITY SECURITIES-SHORT TERM MERCHANDISE INVENTORY RAW MATERIALS WORK IN PROGRESS MANUFACTURING COSTS-VARIABLE MANUFACTURING COSTS-FIXED CONSTRUCTION WORK IN PROGRESS CONSTRUCTION WIP-PROGRESS BILLINGS SUPPLIES ON HAND PREPAID INSURANCE DEFERRED INCOME TAX-CURRENT NOL TAX BENEFIT NOL VALUATION ALLOWANCE LAND BUILDINGS BUILDINGS-ACCUMULATED DEPN EQUIPMENT EQUIPMENT-ACCUMULATED DEPN VEHICLES VEHICLES-ACCUMULATED DEPN LEASED ASSETS LEASED ASSETS-ACCUMULATED DEPN EQUITY SECURITIES-LONG TERM MARKETABLE EQUITY SECURITIES-EQUIT INTEREST EQUITY SECURITIES-LONG TERM COST METHOD LICENSE GOODWILL PATENT PENSION ASSET DEFERRED INCOME TAX-LONG TERM START-UP COSTS DEFERRED R&D COSTS ACCOUNT # 101 105 106 108 111 121 122 123 124 125 126 127 129 132 141 142 143 151 161 162 171 172 181 182 191 192 201 202 203 211 212 213 214 215 217 221 Beginning Balance DR 2,170 73,000 5,900 2,492 3,537 42,000 42,000 - ACCTS PAY-INVENTORIABLE COSTS ACCTS PAY-SUPPLIERS-OTHER COSTS ACCTS PAY-EQUIPMENT ACQ WAGES PAYABLE INTEREST PAYABLE-NOTES INTEREST PAYABLE-LEASE LIABILITY INTEREST PAYABLE-BONDS INCOME TAX PAYABLE DEFERRED INCOME TAXES-CURRENT SHORT-TERM PORTION OF L-T NOTES SHORT-TERM PORTION OF L-T LEASE LIABILITY SHORT-TERM PORTION OF L-T BONDS UNEARNED REVENUE DIVIDENDS PAYABLE LONG-TERM DEBT-NOTES CAPITAL LEASES--L-T LIABILITY LONG-TERM DEBT-BONDS DISCOUNT ON BOND PAYABLE PREMIUM ON BOND PAYABLE DEBT ISSUE COSTS ACCRUED PENSION LIABILITY STOCK COMPENSATION LIABILITY DEFERRED INCOME TAX-LONG TERM WARRANTY LIABILITY CAPITAL STOCK-PREFERRED PAID-IN CAPITAL-PREFERRED CAPITAL STOCK-COMMON PAID-IN CAPITAL-STOCK APPREC RIGHTS PAID-IN CAPITAL-STOCK OPTIONS PAID-IN CAPITAL-FORFEITED STOCK OPTIONS PAID-IN CAPITAL-TREASURY OCI-MARKET GAIN/LOSS-LT EQUITY SECURITES OCI-MKT GAIN/LOSS TAX (BENEFIT) EXPENSE OCI-PRIOR SERVICE COST-PENSIONS OCI-DEFD PENSION TAX (BENEFIT) EXPENSE RETAINED EARNINGS 301 302 303 305 311 312 313 314 315 321 322 323 335 350 401 402 403 404 405 406 414 420 421 422 451 452 461 462 466 467 468 469 471 472 475 476 491 9,490 RETAINED EARNINGS-CASH DIVIDENDS RETAINED EARNINGS-STOCK DIVIDENDS RET EARNINGS-ERROR CORRECTION RET EARNINGS-CUMULATIVE EFFECT TREASURY STOCK 492 493 494 495 499 - SALES REVENUE 501 PAID-IN CAPITAL-COMMON SERVICE REVENUE CONSTRUCTION REVENUE COST OF GOODS SOLD-INVENTORY COST OF GOODS SOLD-AIR FREIGHT COST OF GOODS SOLD-WAREHOUSE RENT COST OF GOODS SOLD-PMME WARRANTY EXPENSE COST OF GOODS SOLD-LS PUMP WARRANTY EXPENSE SERVICE COSTS- DIRECT- CREW WAGES SERVICE COSTS- DIRECT- TRUCK RENTAL SERVICE COSTS-DIRECT-FUEL SERVICE COSTS-DIRECT-R AND M SERVICE COSTS-INDIRECT-SHOP WAGES SERVICE COSTS-INDIRECT-SHOP UTILITIES SERVICE COSTS-INDIRECT-SHOP RENT SERVICE COSTS-INDIRECT-SUPPLIES COST OF CONSTRUCTION REVENUE EARNED 505 511 521 522 523 524 525 551 552 553 554 561 562 563 564 581 SELLING & ADMIN-UTILITIES SELLING & ADMIN-BUILDING RENTAL SELLING & ADMIN-MEDICAL BENEFITS SELLING & ADMIN-PENSION EXPENSE SELLING & ADMIN-OFFICERS SALARIES SELLING & ADMIN-RENT-EQUIPMENT SELLING & ADMIN-SUPPLIES SELLING & ADMIN-OTHER SALARIES SELLING & ADMIN-PROFESSIONAL FEES SELLING & ADMIN-INSURANCE SELLING & ADMIN-PAYROLL AND OTHER TAXES SELLING & ADMINISTRATIVE-OTHER SELLING & ADMINISTRATIVE-STOCK COMPENSATION SELLING & ADMIN-SALES SAL & COMM SELLING & ADMIN- WAREHOUSE WAGES SELLING & ADMIN- BAD DEBTS 601 602 603 604 605 606 607 608 609 610 614 615 620 631 632 651 START UP-CREW TRAINING 680 TRUCK DEPRECIATION SHOP EQUIPMENT DEPRECIATION WAREHOUSE DEPRECIATION AMORTIZATION OF LICENSING COSTS AMORTIZATION OF START-UP COSTS AMORTIZATION OF CAPITAL LEASES AMORTIZATION OF R&D COSTS AMORTIZATION OF PATENT IMPAIRMENT LOSS 701 704 706 710 711 712 713 714 720 INTEREST EXPENSE-NOTE PAYABLE INTEREST EXPENSE-CAPITAL LEASE INTEREST EXPENSE-BONDS MARKET GAIN (LOSS)-ST EQ SEC REALIZED GAIN-MKT EQ SEC INVESTMENT INCOME-MKT EQ SEC-ST INVESTMENT INCOME-MKT EQ SEC-LT INVESTMENT INCOME-EQUITY METHOD INVEST INVENTORY OVER/SHORT MARKET LOSS ON INVENTORY R&D EXPENSE 751 752 753 801 802 803 804 805 808 809 811 INCOME TAX EXPENSE 821 DISCONTINUED OPERATIONS 860 180,589 rounding error will reverse out wit HYDROMAINT, INC. TRIAL BALANCE DECEMBER 31, 20X2 Beginning Balance CR Transactions DR CR 1,238 6,000 - Unadjusted Balance DR CR Adjusting/Correcting Entries DR 18,900 14,450 140,000 - 180,588 ding error will reverse out with AJE's usting/Correcting Entries CR Adjusted Balance DR CR HYDROMAINT, INC. JOURNAL ENTRIES DECEMBER 31, 20X2 J/E # 1 DATE 2/1/X2 ACCT # ACCOUNT NAME 101 CASH 401 LONG-TERM DEBT-NOTES To record issuance of long-term notes payable. DEBIT 312,000 2 2/1/X2 181 VEHICLES 101 CASH To record purchase of trucks from Dealer 1. 312,000 3 101 CASH 105 ACCOUNTS RECEIVABLE 505 SERVICE REVENUE To record revenue from maintenance contracts. 264,000 966,000 4 101 CASH 105 ACCOUNTS RECEIVABLE To record receipts on account. 917,000 5 551 305 101 305 SERVICE COSTS- DIRECT- CREW WAGES WAGES PAYABLE CASH WAGES PAYABLE To record accrual and payment of crew wages. 297,000 14,450 6 181 561 101 305 VEHICLES SERVICE COSTS-INDIRECT-SHOP WAGES CASH WAGES PAYABLE To record accrual and payment of shop wages. 9,000 112,500 7 181 615 605 608 609 614 607 606 101 VEHICLES SELLING & ADMINISTRATIVE-OTHER SELLING & ADMIN-OFFICERS SALARIES SELLING & ADMIN-OTHER SALARIES SELLING & ADMIN-PROFESSIONAL FEES SELLING & ADMIN-PAYROLL AND OTHER TAXES SELLING & ADMIN-SUPPLIES SELLING & ADMIN-RENT-EQUIPMENT CASH To record accrual and payment of S&A expenses. 660 7,250 87,340 52,000 5,400 54,195 16,000 5,000 8 181 562 601 101 VEHICLES SERVICE COSTS-INDIRECT-SHOP UTILITIES SELLING & ADMIN-UTILITIES CASH To record accrual and payment of utilities. 1,520 19,200 4,480 9 181 563 602 101 VEHICLES SERVICE COSTS-INDIRECT-SHOP RENT SELLING & ADMIN-BUILDING RENTAL CASH To record accrual and payment of building rent. 2,384 30,116 6,500 10 553 SERVICE COSTS-DIRECT-FUEL 101 CASH To record purchase and payment of truck fuel. 43,200 11 181 VEHICLES 27,901 564 SERVICE COSTS-INDIRECT-SUPPLIES 32,200 302 ACCTS PAY-SUPPLIERS-OTHER COSTS To record purchase of supplies, capitalize supplies used on truck modifications. 12 129 SUPPLIES ON HAND 564 SERVICE COSTS-INDIRECT-SUPPLIES To adjust to ending supplies inventory count. 13 552 SERVICE COSTS- DIRECT- TRUCK RENTAL 101 CASH To record rent payment for maintenance trucks. 15,000 14 302 ACCTS PAY-SUPPLIERS-OTHER COSTS 101 CASH To record payment on account. 53,668 4,430 15 12/31/X2 181 VEHICLES 2,535 311 INTEREST PAYABLE-NOTES To capitalize interest accrued during construction period for trucks. 16 12/31/X2 701 TRUCK DEPRECIATION 182 VEHICLES-ACCUMULATED DEPN To record depreciation expense on trucks. 17 12/31/X2 704 EQUIPMENT DEPRECIATION 172 EQUIPMENT-ACCUMULATED DEPN To record depreciation expense on shop equipment. 52,000 6,000 18 12/31/X2 710 AMORTIZATION OF LICENSING COSTS 211 LICENSE To record amortization of licensing costs. 3,000 19 12/31/X2 821 INCOME TAX EXPENSE 314 INCOME TAX PAYABLE To record income expense at statutory rate of 30%. Totals 115,815 3,851,744 CREDIT 312,000 312,000 1,230,000 917,000 305,170 6,280 118,400 3,100 227,845 25,200 39,000 43,200 60,101 uck modifications. 4,430 15,000 53,668 2,535 52,000 6,000 3,000 115,815 3,851,744 Independent Accountant's Review Report Board of Directors Hydromaint, Inc. 526 Court Street St. Louis, MO 63110 We have reviewed the accompanying balance sheet of Hydromaint, Inc. as of December 31, 20X2 and 20X1, and the related statements of comprehensive income, changes in stockholders' equity and cash flows for the years then ended. A review consists principally of inquiries of company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. The management of Hydromaint, Inc. is responsible for the financial statements and for internal control over financial reporting. All information included in these financial statements is the representation of the management of Hydromaint, Inc. The accountant's responsibility is to conduct the review in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. These standards require the accountant to perform the procedures to obtain limited assurance that there are no material modifications that should be made to the financial statements. We believe that the results of our procedures provide a reasonable basis for our report. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America. Coe & Lane, CPA's Riverfront Plaza, Suite 2200 St. Louis, MO 63101 January 29, 20X3 HYDROMAINT, INC. NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDING DECEMBER 31, 20X2 AND 20X1 Note 1--Summary of Significant Accounting Policies a. Accounting Method: The financial statements are prepared in accordance with the Generally Accepted Accounting Principles (GAAP) of the United States. As such, management is required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses and disclosure of contingent assets and liabilities. Actual results may differ from those estimates and assumptions. b. Subsequent Events: In accordance with ASC 855, the Company has evaluated subsequent events through January 29, 20X3, which is the date the financial statements were issued. The company implemented a retirement plan on January 1, 20X3, which provides retrospective benefits to all employees starting with their date of hire. There are no other subsequent events that would have a material effect on the financial condition of the Company. c. Revenue Recognition: Service revenue is recorded as services are performed on contract. In accordance with ASC 605-10-25-1, the Company recognizes revenue when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable and collectability is reasonably assured. d. Accounts Receivable: Accounts receivable are recorded at their original carrying value less allowances for estimated uncollectible accounts. e. Supplies on Hand: Supplies on hand are stated at cost, which does not exceed market. The Company uses the first-in first-out inventory method to determine cost. f. Prepaid insurance: Prepaid insurance consists of an insurance policy that will expire in 20X3. g. Property, Plant, and Equipment: Property, plant, and equipment are stated at cost and depreciation is computed using the straight-line method at rates based upon the estimated useful lives of the assets. The major classes of assets owned by the Company follow: Equipment Vehicles 7 years 6 years Expenditures for repairs and maintenance are charged to expense as incurred. Expenditures for major renewals and betterments, which significantly extend the useful lives of existing plant and equipment, are capitalized and depreciated. h. Licensing Agreement: The licensing agreement is stated at cost less accumulated amortization. The license is amortized using the straight-line method over the fifteen years of the license agreement. i. Income Taxes: Income tax expense includes income taxes currently payable and those deferred because of temporary differences between the financial statement and tax bases of assets and liabilities. The deferred income tax classified under Current Assets represents temporary differences relating to current assets and liabilities. The deferred income tax classified under Long Term Liabilities represents temporary differences relating to noncurrent assets and liabilities. j. Earnings per Share Earnings per share is calculated by dividing net income (loss) available to common stockholders by the weighted average shares outstanding during the year. Weighted average shares outstanding during the year were 14,000 in 20X2 and 12,667 in 20X1. Note 2Note Payable On February 1, 20X2, the Company borrowed $312,000 at a fixed interest rate of 6.5%. Proceeds from the note were used to finance vehicles. The terms of the note require four payments of $91,074 annually on February 1, beginning in 20X3. The note is secured by the vehicles and loan covenants require a minimum current ratio and a maximum long-term liabilities-to-equity ratio and restrict payment of dividends, increases in officers' salaries, and loans to officers. The Company is in compliance with all of the loan covenants at year end. In 20X2, interest of $20,280 was incurred with $2,535 capitalized as of part of the modifications to the vehicles. No interest was paid in 20X2. Note 3--Leases and Other Commitments The company leases certain facilities and equipment under operating leases. Operating leases are not capitalized and lease payments are expensed over the life of the lease. An analysis of the 20X2 and 20X1 rent expense by property leased In accordance with ASC 840-20-50-1 follows: Future minimum lease commitments for all non-cancelable leases as of December 31, 20X2 are as follows: Note 4Income Taxes Income tax expense consists of the following: Reported tax payable after applying the 20X1 net operating loss tax benefit of $3,537 is $99,726. No income tax payments were made in 20X2 or 20X1. The effective tax rate for 20X2 is 29.56% due to the change in accounting estimate related to the valuation allowance, and is equal to the statutory tax rate of 30% for 20X1. Note 5 - Fair Value of Financial Instruments The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value: Cash: The carrying amount approximates fair market value because of the short maturity of the instruments. Note Payable: The fair value of the Company's note payable is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities. The estimated fair values of the Company's financial instruments are as follows: Note 6--Reconciliation of Net Income (Loss) to Net Cash Flows from Operating Activities The schedule showing the reconciliation of net income for 20X2 and 20X1 to the net cash flows from operating activities in accordance with ASC 230-10-45-30 is presented below: Note 7-- Information about Major Customers The Company's source of revenue was composed of nine maintenance contracts during 20X2 and six contracts during 20X1. Five contracts qualify as major customers in accordance with ASC 280-10-50-42 in 20X2 and individually provided a range of 10 to 16 percent of total revenues earned. Five customers each provided a range of 10 to 25 percent of revenues earned during 20X1