Question: On October 1 2014 Mark Brandford opened Mark s Coffee Shop

On October 1, 2014, Mark Brandford opened Mark’s Coffee Shop, Inc. Brandford is now at a crossroads. The October financial statements paint a glowing picture of the business, and Brandford has asked you whether he should expand the business. To expand the business, Brandford wants to be earning net income of $10,000 per month and have total assets of $50,000. Brandford believes he is meeting both goals. To start the business, Brandford invested $25,000, not the $15,000 amount reported as “Common stock” on the balance sheet. The business issued $25,000 of common stock to Brandford. The bookkeeper “plugged” the $15,000 “Common stock” amount into the balance sheet (entered the amount necessary without any support) to make it balance. The bookkeeper made some other errors too. Brandford shows you the following financial statements that the bookkeeper prepared:

1. Prepare corrected financial statements for Mark’s Coffee Shop, Inc.: single step Income Statement, Statement of Retained Earnings, and Balance Sheet. Then, based on Brandford’s goals and your corrected statements, recommend to Brandford whether he should expand therestaurant.
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  • CreatedJuly 25, 2014
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