After you have been out of college for a year, you have $5,000 to invest. A friend
Question:
Visits with your friend turn up the following facts:
a. The company owes an additional $10,000 for TV ads that was incurred in December but not recorded in the books.
b. Software costs of $20,000 were recorded as assets. These costs should have been expensed. My Dream paid cash for these expenses and recorded the cash payment correctly.
c. Revenues and receivables of $10,000 were overlooked and omitted.
Requirements
1. Prepare corrected financial statements.
2. Use your corrected statements to evaluate My Dream's results of operations and financial position.
3. Will you invest in My Dream? Give your reason.
Step by Step Answer:
Financial Accounting
ISBN: 978-0133472264
5th Canadian edition
Authors: Charles Horngren, William Thomas, Walter Harrison, Greg Berberich, Catherine Seguin