Appendix 1

I Summary notes of your discussion with Scott Ginny GPP provides copying and small print job services from a single location close to a university. The business was organized in January 2022 to meet the needs of the university and students in the area. At the time, there were no printing businesses in the area, and Scott saw this as an opportunity to become his own boss after many years of working as a mechanic for a local bus company.

With his initial investment used to start GPP, Scott purchased the computers, printers, copiers, and scanners needed to provide the full range of quality services that he thought his customers would need. He also purchased the furniture and fixtures needed to set up a functional and attractive space for the business.

Scott's wife, Allison, has been a stay-at-home mom for the last 10 years. She is happy to help with the business and performs GPP's accounting and prepares yearly income statements. GPP has not paid her anything for her services.

Scott is unsure why the bank needs financial statements in compliance with GAAP. He feels the current income statement and a cash flow projection should be sufficient, given that GPP is such a small organization. Allison suggested that if GPP must prepare financial statements, it should do so under International Financial Reporting Standards (IFRS). Allison told Scott that she did not understand all the factors that should be considered when choosing an accounting framework, but that she prefers IFRS as it appears to have several free online resources available.

Allison records GPP's revenue and expenses by reviewing the company's monthly bank statement in conjunction with cancelled cheques. Amounts owed by customers are tracked at the time of delivery on a designated sheet of paper kept by the cash register .As cash is received, the related customer's balance is reduced. On December 31, 2023, there was a balance of $16,200 still receivable from customers. On December 31, 2022, there was a balance of $11,505.

When Scott and Allison are in the store, they are the only ones who operate the register. Scott admits that, because he is in too much of a hurry, he sometimes puts the cash in his pocket rather than take the time to ring up the sale. Having cash in hand allows him to pay his babysitter and other personal expenses. Though it was difficult for him to be certain, Scott estimated that transactions worth about $45,000 each year have been handled in this way. Scott confirmed that he has not filed a personal tax return since he started GPP because he has not taken a salary.

The amount of inventory on hand at the end of each year is counted so that Scott can get a clear idea of what he has on hand. Scott determined the value of the inventory on December 31, 2023 and 2022, by using the list of what was in the stock room on these dates and applying prices from the most recent supplier price lists. On December 31, 2022, GPP had inventory of $8,200, and on December 31, 2023, the inventory balance was $12,222. This has not been recorded in the financial statements, but Scott likes to know for himself.

Appendix II

Ginny's Professional Print Shop Ltd. Draft

income statement For the year ended December 31 2023 2022

Sales $ 435,575 $ 336,667

Cost of merchandise sold 124,984 101,000

Selling, general, and administrative expenses 68,804 41,100

Salaries and wages 90,099 87,740

Computers, printers, copiers, and scanners 15,000 55,000

Furniture and fixtures 15,000

Advertising and promotion 34,727 29,503

Utilities 18,300 17,900

Bank charges 2,000 1,500

Rent 22,000 22,000

Other expenses 16,618 17,443

392,532 388,186

Net income (loss) $ 43,043 $ (51,519)

What would be the revised income statement for the year ended December 31,2023 based on Apendix 1 and 11