Question: Jimmy operates a large service station garage and truck stop

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.

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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