Based on all the information provided from the financial statements, prepare a memo to Bruno where you as a professional accountant evaluate his business. Specifically address his concerns:

a)How much can be paid in dividends by June 30th?

b)How much dividends he expects to collect per share per month (during 12 months) to achieve the $2,300 monthly that Bruno set as target?

c)What is the target net income to achieve item b) if only working the 7 months of the cottage county season per year?

d)With the data of the financial statements that you have completed, did Bruno achieved his target as set in item c)?

e)Make two clear suggestions of how the business can be improved so he can achieve and surpass the target.

Sheet1 CHARTS OF ACCOUNT Account name Code Cash Accounts Receivable Merchandise Inventory Website Accumulated depreciation-website Bank loan- Line of Credit Interest Payable Income tax payable Retained earning Sales Common Share Accounting fee expense Utilities expense Car rent expense Income tax expense Business setup expense Domain cost Miscellaneous expense Cost of Goods Sold Delivery Cost Garage Rent expense Supplies Expense Dividends expense Interest expense Depreciation expense Type of account 101 Current Asset 102 Current Asset 103 Current Asset 104 Current Asset 105 Contra Asset 201 Liability 202 Liability 203 Liability 301 Equity 302 Equity 303 Equity 401 Expense 402 Expense 403 Expense 404 Expense 405 Expense 406 Expense 407 Expense 408 Expense 409 Expense 410 Expense 411 Expense 412 Expense 413 Expense 414 Expense Normal Balance debit debit debit debit credit credit credit credit credit credit credit debit debit debit debit debit debit debit debit debit debit debit debit debit debit Date (2017) June 1 1 1 1 1 1 1 Bank Reconciliation: There is not enough information provided to make a bank reconciliation. The case does not give information for the bank statement. We do not know the unadjusted bank statement balance or if there are any bank charges or NSF charges that they added. There is no information about any outstanding cheques or deposits that the bank statement has not included. There is no information about any automatic expenses that have been taken out and are not included in the cash book balance. 1 1 4 5 6 7 Page 1 Sheet1 General Journal Account title and Explanation Cash Common share Ref 101 304 Debit Credit 1900 1900 to record the issue of 10 shares at $1900 Garage Rent expense Cash 410 101 100 402 101 100 403 101 100 406 407 101 1000 169 101 201 2500 100 to record the garage rent given Utilities Expense Cash 100 to record utilities paid Car rent expense Cash 100 to record the car rent paid Domain cost Miscellaneous expense Cash 1169 to record the website design and set up cost and paid by cheque (#1) Cash Bank loan - Line of credit 2500 to record the use of line of credit Business set up expense Cash 405 101 500 411 101 Sales 50 Sales 103 101 Sales 2000 Acc-Dep Website 116.9 101 302 15 101 302 140 101 302 15 101 302 130 15 140 15 to record the sale of flowers Cash Sales 1231 2000 to record the sale of flowers - simple arrangement Cash Merchandise Inventory 2000 769 to record the sale of flowers Cash A/R 50 to record the purchase of inventory Cash 8227 1500 to record the purchase of fresh flowers by cheque (#2) Merchandise Inventory Cash 100 100 100 1169 500 50 2000 500 500 500 500 2070 138 500 to record the fees paid to set the business Supplies expense Cash Assets Cash 1900 2500 15 140 15 130 100 300 360 140 25 320 440 40 340 530 400 100 400 600 200 505 9500 1273 Page 2 130 Sheet1 T- Accounts Liability Bank Loan -LOC 2500 Expense Utilities Expense 100 Interest Payable 50 Car rent expense 100 Income tax Payable Income tax expense Gorgeous Tulip Inc. Trial Balance Ended June 30, 2017 Account Title Cash Accounts Receivable Merchandise Inventory Debit 1273 1500 769 Acc-Depreciation -Website 200 Equity Common Share 1900 200 Business setup expense 500 Domain Cost 1000 Sales 15 140 15 130 100 300 360 140 25 320 440 40 340 530 400 100 400 600 200 505 1500 6600 Bank loan - LOC Interest payable Income tax payable Sales Common Share Utilities expense Car rent expense Income tax expense Business setup expense Garage rent expense 100 Dividend expense 2070 Interest expense 50 Depreciation Expense 116.9 Misc. expense 169 Delivery Cost 138 COGS 1231 Supplies Expense 50 500 500 500 500 2050 Page 3 Domain cost Miscellaneous expense COGS Delivery cost Garage rent expense Supplies expense Dividends expense Interest expense Depreciation expense Total 100 100 200 500 1000 169 1231 138 100 2050 2070 50 116.9 $11,366.90 Sheet1 Gorgeous Tulip Inc. Income Statement Month ended June 30,2017 Credit 116.9 2500 50 200 6600 1900 Gorgeous Tulip Inc. Statement of Owner's Equity Month ended June 30, 2017 Revenue Sales Expenses: Utilities expense Car rent expense Income tax exp. Business setup exp. Domain cost Misc. expense COGS Delivery cost Garage rent exp. Supplies expense Interest expense Depreciation exp. Net Income 6600 Bruno, Capital June 1,2017 Add: Net Income Bruno, Capital June 30,2017 100 100 200 500 1000 169 1231 138 100 2050 50 116.9 5754.9 $845.10 Note: Assumption: The depreciation expense is not added in the income statement. $11,366.90 Page 4 Sheet1 p Inc. r's Equity 30, 2017 Gorgeous Tulip Inc. Statement of Retained Earnings For Month ended June 30, 2017 7 17 845.1 $845.10 Retained earning, June 1, 2017 Net Income Common Shares dividends Retained earning, June 30, 2017 Page 5 845.1 -2070 -$1,224.90 Sheet1 Gorgeous Tulip Inc. Balance Sheet Ended June 30,2017 Asset Cash A/R Merchandise Inventory Acc-Depreciation -Website $1,273.00 $1,500.00 $769.00 -116.9 Memo: Liabilities Interest payable Income Tax payable bank loan -LOC Total liabilities Owner's equity Retained earning Common Share Total OE Total Assets $3,425.10 Total liabilities &OE Page 6 $50.00 $200.00 $2,500.00 $2,750.00 -$1,224.90 $1,900.00 $645.10 $3,425.10 To: Gorgeous Tulip Inc. From: The Professional Date: June 30, 2017 Re: Evaluation of Busines After analyzing all the dividends Sheet1 lip Inc. sional Accountant 17 Business g all the Financial Statements the total amount of dends that can be paid is $ 2070.00. Page 7 Sheet1 8 8 9 10 11 12 15 15 16 17 18 19 22 22 Page 8 Sheet1 to record the sale of flowers - complex arrangement Supplies expense Cash 411 101 500 101 302 100 101 302 300 101 302 360 101 302 140 101 302 25 411 101 500 101 302 320 101 302 440 101 302 40 101 302 340 101 302 530 411 101 500 101 400 500 to record the purchase of fresh flowers by cheque (#4) Cash Sales 100 to record the sale of flowers and arrangement Cash Sales 300 to record the sale of flowers and arrangement Cash Sales 360 to record the sale of flowers and arrangement Cash Sales 140 to record the sale of flowers and arrangement Cash Sales 25 to record the sale of flowers and arrangement Supplies expense Cash 500 to record the purchase of fresh flowers by cheque (#5) Cash Sales 320 to record the sale of flowers and arrangement Cash Sales 440 to record the sale of flowers and arrangement Cash Sales 40 to record the sale of flowers and arrangement Cash Sales 340 to record the sale of flowers and arrangement Cash Sales 530 to record the sale of flowers and arrangement Supplies expense Cash 500 to record the purchase of fresh flowers by cheque (#6) Cash Page 9 Sheet1 Page 10 Sheet1 Page 11 Sheet1 Page 12 Sheet1 Page 13 Sheet1 Page 14 Sheet1 23 24 25 26 29 30 30 30 30 30 30 30 30 Page 15 Sheet1 Sales 302 400 to record the sale of flowers and arrangement Cash Sales 101 302 100 101 302 400 101 302 600 101 302 200 411 101 500 101 302 505 412 101 2070 413 202 50 102 302 1500 409 101 138 105 414 116.9 408 103 1231 404 203 200 100 to record the sale of flowers and arrangement Cash Sales 400 to record the sale of flowers and arrangement Cash Sales 600 to record the sale of flowers and arrangement Cash Sales 200 to record the sale of flowers and arrangement Supplies expense Cash 500 to record the purchase of fresh flowers by cheque (#7) Cash Sales 505 to record the sale of flowers and arrangement Dividend expense Cash 2070 to record the dividends paid Interest Expense Interest payable 50 to record the interest payable for LOC Account Receivable Sales 1500 to record the service delivered to Mr. Gates Delivery cost Cash 138 to record the amount paid for delivery done by someone else Depreciation expense Acc-Dep- website 116.9 to record the depreciation of the website Cost of goods sold Merchandise Inventory 1231 to record the use of inventory for the month Income tax expense Income tax payable to record the income tax accrued for the month Page 16 200 Sheet1 Page 17 Sheet1 Page 18 Sheet1 Page 19 Sheet1 Page 20 Sheet1 Page 21