You have been asked by a client to review the records of Pina Company, a small manufacturer of precision tools and machines. Your client is interested in buying the business, and arrangements have been made for you to review the accounting records. Your examination reveals the following information. 1. Pina Company commenced business on April 1, 2015, and has been reporting on a fiscal year ending March 31. The company has never been audited, but the annual statements prepared by the bookkeeper reflect the following income before closing and before deducting income taxes.

Year Ended March 31		Income Before Taxes
2016		$74,464
2017		115,856
2018		107,723

2. A relatively small number of machines have been shipped on consignment. These transactions have been recorded as ordinary sales and billed as such. On March 31 of each year, machines billed and in the hands of consignees amounted to:

2016		$6,760
2017		none
2018		5,814

Sales price was determined by adding 25% to cost. Assume that the consigned machines are sold the following year. 3. On March 30, 2017, two machines were shipped to a customer on a C.O.D. basis. The sale was not entered until April 5, 2017, when cash was received for $6,344. The machines were not included in the inventory at March 31, 2017. (Title passed on March 30, 2017.) 4. All machines are sold subject to a 5-year warranty. It is estimated that the expense ultimately to be incurred in connection with the warranty will amount to ¹₂ of 1% of sales. The company has charged an expense account for warranty costs incurred. Sales per books and warranty costs were as follows.

				Warranty Expense for Sales Made in
Year Ended March 31		Sales		2016		2017		2018		Total
2016		$977,600		$790						$790
2017		1,050,400		374		$1,362				1,736
2018		1,866,800		333		1,685		$1,986		4,004

5. Bad debts have been recorded on a direct write-off basis. Experience of similar enterprises indicates that losses will approximate 1% of receivables. Bad debts written off were:

		Bad Debts Incurred on Sales Made in
		2016		2017		2018		Total		Bad Debt Expense Based on 1% of Receivables
2016		$780						$780		$2,427
2017		832		$541				1,373		2,659
2018		364		1,872		$1,768		4,004		4,637

6. The bank deducts 6% on all contracts financed. Of this amount, ¹₂% is placed in a reserve to the credit of Pina Company that is refunded to Pina as finance contracts are paid in full. (Thus, Pina should have a receivable for these payments and should record revenue when the net balance is remitted each year.) The reserve established by the bank has not been reflected in the books of Pina. The excess of credits over debits (net increase) to the reserve account with Pina on the books of the bank for each fiscal year were as follows.

2016		$3,120
2017		4,056
2018		5,304
		$12,480

7. Commissions on sales have been entered when paid. Commissions payable on March 31 of each year were as follows.

2016		$1,456
2017		936
2018		1,165

8. A review of the corporate minutes reveals the manager is entitled to a bonus of 1% of the income before deducting income taxes and the bonus. The bonuses have never been recorded or paid.

Present a schedule showing the revised income before income taxes for each of the years ended March 31, 2016, 2017, and 2018. (Enter negative amounts using either a negative sign preceding the number e.g. -15,000 or parentheses e.g. (15,000). Round answers to the nearest whole dollar, e.g. 5,275.)

audited, but the annual statements prepared by the bookkneperrmed the Sales price was determined received for st 344. The machines at March 2002. Sales per books and warranty costs were as follows 6. The bank deducts on contracts financed orthis amount, yn.isplaced in a reserve to the Campany that is on sales have been entened when paid commi payable on 3a review the tenaerate minutes reveals the manager is entitled to a bonus er t ofthe eame takes and the Present a schedule showing the revised income before income taesforeadhofthe vears ended Marth30.200s.2012, and 2008 (Enter the nearest whole 5.27s By accessing Question Assitance, you w Inam while you