INSTRUCTIONS:

1. Please read all the questions and answer them all. Please include a cover page with your name, student number, and other relevant information. If needed a bibliography.

2. When using excel ensure to import into the case as required.

3. Round to two (2) decimals as required.

Emily had just completed her first year of business and just finished her first trial balance but is worried that not all the information is accounted for when she reviewed the year-end on April 15, 2020. She has decided to hire Bill from Never Wrong, LLP. to review the unadjusted trial balance. The following is the unadjusted trial balance as of March 31, 2020:

Emily Tina Inc.

Unadjusted Trial Balance

March 31, 2020

Account

Cash $ 61,000

Accounts Receivable $ 170,000

Inventory $ 42,000

Prepaids $ 9,500

Equipment $ 1,105,000

Accumulated Depreciation - Equipment $ 224,000

Other Assets $ 80,900

Accounts Payable $ 104,000

Unearned Revenue $ 46,000

Notes Payable (Due 2026) $ 100,000

Common Shares $ 364,750

Revenue $ 1,298,000

Salaries Expense $ 237,000

Rent Expense $ 329,000

Interest Expense $ 102,350

$ 2,136,750

$ 2,136,750. $ 2,136,750

The following was reviewed with Bill and Emily and agree to the following adjustments for the year ended June 30:

a) Physical Inventory counts shows $16,500 of supplies on hand.

b) Prepaid rent at March 31 should be $5,000.

c) Depreciation for 2020 is $55,000.

d) Unearned Revenue should be 31,000.

e) Wages in the amount of $23,000 are owed but unpaid and not recorded at yearend.

f) Six Months interest at 6% on the note was paid on December 31. Interest for the period from January 1 to March 31 is not paid and not recorded.

g) Income tax of $89,000 is owed but not recorded and unpaid.

Emily wants Bill to provide her with the adjusting journal entries as well as the statement of earnings, statement of retained earnings, and the statement of financial position. In addition, Emily thought about the following things, one is a bank reconciliation is done monthly, but no one looks at them. She also tries to monitor inventory by having everyone complete a job sheet. Each person is responsible for noting the inventory used and should be done immediately, however sometimes they are not done at that point, Emily reminds everyone to do at least at the end of each day. Emily also wants to look at better controls. Can you briefly explain some control issues that would be a benefit for Emily to institute or to improve on in which she is currently doing for the company?