Prompt: Riggins' Window Washing Company is experiencing cash flow problems after the first month of business and needs a loan. Riggins has a friend who is willing to lend him the money he needs provided she can be convinced that he will be able to repay the debt. Riggins has assured his friend that his business is viable, but his friend has asked to see the company's financial statements. Riggins' accountant (you) produced the FOLLOWING financial statements. Riggins Window Washing Company Income Statement For May 31, 20xx $ Service Revenue Operating Expenses Net Loss 38,000 70,000 (32,000) $ Riggins Window Washing Company Balance Sheet As of May 31, 20xx Assets Cash $ Accts. Receivable 35.000 3.000 82.000 Liabilities and Stockholders' Equity Liabilities $ Stockholder's Equity Common Stock Retained Earnings Total Liabilities and Stockholder's Equity $ 82.000 (32.000) 85,000 Total Assets $ 85,000 After you (the accountant) handed Riggins the financial statements above, Riggins made the following adjustments and created new financial statements to give to his friend. He recorded $82,000 of revenue on account from Virginia's Museum for a contract to clean the museum that was still being negotiated for next month. Virginia had scheduled a meeting to sign a contract the following week, so Riggins was sure that he would get the job. Virginia has a reputable company, and Riggins is confident that he could ultimately collect the $82,000. Also, he subtracted $30,000 of accrued salaries expense and corresponding liability. He reasoned that since he had not paid the employees, he had not incurred any expense. Required: You are the accountant and you know the adjustments Riggins made are not a fair representation of Riggins' Window Washing Company. Reconstruct the financial statement above as they would appear after Riggins' adjustments were made (AKA fudged the numbers). In written words, explain to him how his changes have affected both the income statement and balance sheet. Also explain how he has He recorded $82,000 of revenue on account from Virginia's Museum for a contract to clean the museum that was still being negotiated for next month. Virginia had scheduled a meeting to sign a contract the following week, so Riggins was sure that he would get the job. Virginia has a reputable company, and Riggins is confident that he could ultimately collect the $82,000. Also, he subtracted $30,000 of accrued salaries expense and corresponding liability. He reasoned that since he had not paid the employees, he had not incurred any expense. Required: You are the accountant and you know the adjustments Riggins made are not a fair representation of Riggins' Window Washing Company. Reconstruct the financial statement above as they would appear after Riggins' adjustments were made (AKA fudged the numbers). In written words, explain to him how his changes have affected both the income statement and balance sheet. Also explain how he has violated the revenue recognition concept (adding income before work was completed) and the matching principle (deleting accrued salaries expense and corresponding liability). You should contribute your initial post no later than 11:59 p.m. MST on Wednesday. Prompt: Riggins' Window Washing Company is experiencing cash flow problems after the first month of business and needs a loan. Riggins has a friend who is willing to lend him the money he needs provided she can be convinced that he will be able to repay the debt. Riggins has assured his friend that his business is viable, but his friend has asked to see the company's financial statements. Riggins' accountant (you) produced the FOLLOWING financial statements. Riggins Window Washing Company Income Statement For May 31, 20xx $ Service Revenue Operating Expenses Net Loss 38,000 70,000 (32,000) $ Riggins Window Washing Company Balance Sheet As of May 31, 20xx Assets Cash $ Accts. Receivable 35.000 3.000 82.000 Liabilities and Stockholders' Equity Liabilities $ Stockholder's Equity Common Stock Retained Earnings Total Liabilities and Stockholder's Equity $ 82.000 (32.000) 85,000 Total Assets $ 85,000 After you (the accountant) handed Riggins the financial statements above, Riggins made the following adjustments and created new financial statements to give to his friend. He recorded $82,000 of revenue on account from Virginia's Museum for a contract to clean the museum that was still being negotiated for next month. Virginia had scheduled a meeting to sign a contract the following week, so Riggins was sure that he would get the job. Virginia has a reputable company, and Riggins is confident that he could ultimately collect the $82,000. Also, he subtracted $30,000 of accrued salaries expense and corresponding liability. He reasoned that since he had not paid the employees, he had not incurred any expense. Required: You are the accountant and you know the adjustments Riggins made are not a fair representation of Riggins' Window Washing Company. Reconstruct the financial statement above as they would appear after Riggins' adjustments were made (AKA fudged the numbers). In written words, explain to him how his changes have affected both the income statement and balance sheet. Also explain how he has He recorded $82,000 of revenue on account from Virginia's Museum for a contract to clean the museum that was still being negotiated for next month. Virginia had scheduled a meeting to sign a contract the following week, so Riggins was sure that he would get the job. Virginia has a reputable company, and Riggins is confident that he could ultimately collect the $82,000. Also, he subtracted $30,000 of accrued salaries expense and corresponding liability. He reasoned that since he had not paid the employees, he had not incurred any expense. Required: You are the accountant and you know the adjustments Riggins made are not a fair representation of Riggins' Window Washing Company. Reconstruct the financial statement above as they would appear after Riggins' adjustments were made (AKA fudged the numbers). In written words, explain to him how his changes have affected both the income statement and balance sheet. Also explain how he has violated the revenue recognition concept (adding income before work was completed) and the matching principle (deleting accrued salaries expense and corresponding liability). You should contribute your initial post no later than 11:59 p.m. MST on Wednesday