Question

Jimmy operates a large service station, garage, and truck stop on Highway 95 near Plainview. His brother, Bill, has recently joined as a partner, even though he still keeps a small PA practice. One slow afternoon, they were discussing financial statements with Bert, the local PA who operates the largest public practice in Plainview.
Jimmy: The business is growing, and sometimes I need to show financial statements to parts suppliers and to the loan officers at the bank. The problem is, they don’t like the way I put ’em together. Bill: Jimmy, I know all about that. I can compile a jim-dandy set of financial statements for us.
Bert: No, Jimmy. Bill can’t do compiled financial statements for you. He’s not independent. Jimmy: I know, Mom didn’t let him outta the house ’til he was 24.
Bert: That so?
Jimmy: But, Bert, those fellas are always asking me about accounting policies, contingencies, and stuff like that. Said something about “footnotes.” I don’t want to fool with all that small print.

Required:
Think about the financial disclosure problems of Jimmy and Bill’s small business. What three kinds of compiled financial statements can be prepared for them and by whom?



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  • CreatedJanuary 09, 2015
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