You are a manager with Hodges Jones & Sylvia the Firm and a member of the Firms audit team for the audit of Bravo Corporation the Company One hundred percent of the outstanding common stock of Bravo Corporation is owned by Roger Jones, the Companys CEO. Mr Jones also owns one hundred percent of the outstanding membership interest of Tango LLC the LLC which owns and leases office and equipment storage facilities to Bravo Corporation.

During the planning and risk assessment process for the Firms audit of the Companys financial statements as of and for the year ended December management has identified, and your audit procedures have confirmed the following related party transactions.

During the year ended December the Company paid the LLC $ per month in rents in connection with the Companys utilization of office space and equipment rental space. As of December the Company owed LLC $ for its December rent. This amount was paid in full on January The CFO of Bravo believes that the $ per month is a market rental rate. The rents paid are material to the financial statements of Bravo Corporation.

CEO Roger Jones was paid a salary of $ per month for a total of $ for the calendar year This salary was paid on a twice monthly basis and included all required withholdings of federal and state taxes. For purposes of this problem, assume that the salary is material to the financial statements of Bravo Corporation.

Mr Jones wife, Rita Jones, is a CPA and owns her own CPA firm, which she operates as a sole proprietorship. As a convenience for the Company, Rita Jones has drafted the Companys financial statements of Bravo Company. Rita Jones did not charge the Company any fee for this service. Hodges Jones & Sylvia would charge $ for these services, which is material to the financial statements of Bravo Corporation.

As of December Roger Jones had loaned the Company $ on a shortterm basis. This outstanding loan bears interest at per year. The loan is documented in writing and has a stated maturity date of July The loan is unsecured and is material to the financial statements of Bravo Corporation.

Required:

Based on the preceding information and by reference to ASC see FASB Basic View Link in Canvas Announcements draft the Companys related party disclosure note that will be included in the Companys financial statements. For purposes of this problem, assume that Tango LLC meets the requirements for VIE analysis and potential for consolidation under the provisions of ASC AB by which the LLC is not required to be consolidated with the Company.

Answer rating: 100% (QA)

Related Party Disclosures Note Bravo Corporation As of December 31 2022 Related Party Transactions 1 ... View the full answer