It is January $12,2024,$ and Harita Sandu, the owner of Good Time Pub Ltd$.($GTP$),$ has

just hired you, CPA, as the manager of GTP$.$

GTP is located on the campus of a local university and, in the past, Harita hired fourth$-$

year business students to run the pub. Unfortunately, business over the past few years

has been slipping. Harita attributes this both to the students she has hired being more

academically focused, as well as to increased local competition. Recognizing a need for

more steady leadership in order to address the declining sales, Harita made the

decision to hire you.

To rejuvenate GTP$,$ Harita has approached a local bank for financing. The bank has

requested a copy of GTP$$s December $31,2023,$ year$-$end financial statements prepared

in accordance with accounting standards for private enterprises $($ASPE$).$ Harita has

always had a student prepare the financial statements, but their purpose was primarily

for internal use. She would like you to prepare an analysis of any accounting issues that

may need to be corrected for the statements to be compliant with ASPE and ensure that

GTP is not in violation of the debt covenant specified by the bank. Harita$$s notes on

GTP$$s accounting policies are included in Appendix I.

One of the challenges at GTP is that, with constantly changing staff, it has been difficult

to implement changes and see them through. You spent the morning with Harita and

the staff taking notes on the operations of GTP $($Appendix II$).$ In addition to your

analysis of the accounting issues, Harita would like you to prepare a memo to her on

the weaknesses you observe in GTP$$s financial operations along with valid

recommendations to address them.