whats wrong report for balance sheet
Need to Know: - The owners want accounting to be done on an acerual basis, not cash basis. - Vendors are approved by management, and are mainly music instrument-based vendors. - On January 1 , the company renewed its annual insurance policy and paid the total amount at that time. - The rent for the store front is $600 per month. - The company pays the accountant and secretary through QuickBooks using an account called Staff Payroll Expense, and Staff Payroll Liability. - The company has an equal payment plan set up with the electric and the phone company. - The owner purchased a new company car in the month of April costing $23,595 that will be financed through My City Bank using a Note Payable. 100\% financed no money down. The car will be depreciated each month according to an IRS approved depreciation schedule for 5 years. - Typically April is the best month for revenue sales as schools prepare for graduation in May. Historically sales tail off in May and then pick up during the summer month. - You authorized the purchase of a new Printer/Scanner in May costing $900. - All fixed assets depreciate and are recorded monthly rather than at the end of the year since the amount isn't that much. The accountant records month-end depreciation expense and accumulated depreciation. Action: Review the two financial statements by circling accounts and dollar amounts that may be incorrect. Now in a Word document, write your concerns. For example: Why is revenue so low? Next line, why weren't funds deposited? Next line, who approved this expense account? Get the idea? Just one line pet question. My job will be to head back to my office, red faced, and fix the enors. Other Current Liabilitin: 2020 - Notes Payable 2030 - Interest Payable 2040 - Home mortgage liabllity 2200 - Sales Tax Payable Total Other Current Llabilities Total Current Liabilities Total Liabilities 8:29 AM 11/21/18 Accrual Basis Lynn's Music Studlo Balance Sheet As of May 31, 2016 Equity 3010 - Lymn Garcia, Capital 3020 - Lynn Garcia, Drawings Net Income Total Equity TOTAL LIABILITES \& EQUITY \begin{tabular}{|c|c|} \hline May 31,16 & Apr 30. 16 \\ \hline 12,000.00 & 12,00000 \\ \hline1,500.00 & 1,000.00 \\ \hline-17.926 .74 & \begin{tabular}{r} 23,015,00 \\ \end{tabular} \\ \hline-7.426 .74 & 12,015.00 \\ \hline 24,161.26 & 19,818.80 \\ \hline \end{tabular} Page 1
