On October l, 2016, Hilda Petrochuck opened Hilda's Coffee Shop, Inc. Petrochuck is now at a crossroads.

Question:

On October l, 2016, Hilda Petrochuck opened Hilda's Coffee Shop, Inc. Petrochuck is now at a crossroads. The October financial statements paint a glowing picture of the business, and Petrochuck has asked you whether she should expand the business. To expand the business, Petrochuck wants to be earning net income of $10,000 per month and have total assets of $50,000. Petrochuck believes she is meeting both goals.
To start the business, Petrochuck 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 Petrochuck. 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. Petrochuck shows you the following financial statements that the bookkeeper prepared:
On October l, 2016, Hilda Petrochuck opened Hilda's Coffee Shop,
On October l, 2016, Hilda Petrochuck opened Hilda's Coffee Shop,

Requirement
1. Prepare corrected financial statements for Hilda's Coffee Shop, Inc.: single-step Income Statement, Statement of Retained Earnings, and Balance Sheet. Then, based on Petrochuck's goals and your corrected statements, recommend to Petrochuck whether she should expand the restaurant.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
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Related Book For  answer-question

Financial Accounting

ISBN: 978-0134127620

11th edition

Authors: Walter Harrison, Charles Horngren, William Thomas, Wendy Tietz

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