Hello,looks like it is a big work, but it is not that much.Documents 1 and 2 are giving info about a company.week 3 document has a yellow highlighted requirement.I did my IR for issue 1 and 2 please check on them and do the AC for them.I only need the retained earnings statement for the whole company.Thank you
(3) 3-1: Paper and Presentation - BAM Year 1 Hello - you will need to read the giving info from AGUAMAINT.INC required 1 then 2 . - Then the" Action items" in the “week 3” document. - last, there are" 1" and "2" in yellow font color, those ones you will do the IRAC for them. Action Items 1. Based on the CFO's answers to your group's questions, your research from Issue and Rule Research, and your required readings, do the following for each identified accounting issue (1 and 2 only in yellow high light) : a. Issue: Succinctly state the accounting issue. b. Rule: Using your research of authoritative accounting sources, briefly identify and explain the authoritative rule. c. Analysis: Apply the facts of the case study to the rule and provide an in-depth analysis based on the issue. Your analysis should also include supporting schedules, calculations, and/or correcting journal entries. d. Conclusion: State your conclusion(s) based upon the results of your analysis and indicate any changes to the financial statements and disclosure notes resulting from the rule. 2. Using Word and/or Excel, prepare corrected balance sheet and statement of income and retained earnings including supporting schedules that incorporate the following items (Excel - Financial statements and journal entries. Word - Examinations, summaries, disclosure notes, etc...): 2. Prepare and Calculate the Retained Earnings Notes: 1. Instructions to access the RIA Checkpoint and the FASB Accounting Standards Codification databases. Accounting research data can be accessed either through the: a. RIA Checkpoint database - Practice Area: Accounting, Audit and Corporate Finance located on the Franklin library website or through the 2. American Accounting Association (AAA) FASB Codification student login. Login information for the AAA website can be obtained from your professor. YOUR QUESTIONS AND CLIENT RESPONSES Issue 1. Are all receivables collectible? Do you require an allowance for doubtful accounts? Client response: Collection of the receivables will be no problem. We know all the customers with whom we have a contract and we have reviewed each of the accounts at year-end for any potential problems. Everyone has paid on time thus far. Issue 2. Are any supplies still unused at year-end? If so, did you take a physical inventory of them? Client response: There is usually a quantity of shop supplies on hand. Also, the quantities are fairly stable over time. We took an inventory on January 2. I computed the cost of the items from the latest invoices and derived an amount of $5,190. My IR : Issue number (1) Issue: Aguamaint wound up discounting $69,600 of their receivables this year since they could not gather on them. They feel that they may need to discount an extra money from the open records on their books as of December 31, 20X1. Also, Aguamaint has an overdue debt on its accounts, for which in the foreseeable future the receipt of cash or cash equivalents for repayment (execution) of this debt is not expected, it is considered doubtful. The foreseeable future refers to a period of at least three years. Rule: The rule for the stipend for uncollectible records is in ASC 310-10-35-10 Loss from Uncollectible Receivables. The standard necessitates that a recompense be made when both of two conditions are met. The primary condition is that there should be data before giving the fiscal summaries that demonstrates that there is a chance of no gathering on a receivable. The subsequent condition is that the misfortune on the receivable can sensibly be assessed. On the off chance that these conditions can be meet than a section should be offered for the leniency. Also, a disclosure note needs to be made in the financial statements, it is all about the allowance regardless of whether if any entry is made or not. Issue number (2) Issue: On December 31, Aguamaint led a physical stock of their shop supplies. They determined the expense of the stock dependent on the most current solicitations. They booked a modifying section to catch this expense. They do not need to bother with an extra changing passage this year. Rule: The rule for booking Inventory is FASB 330-10-30 and 35. This guidelines expresses that an organization that has working materials that would be utilized in the typical course of working together ought to be reserved as stock during the period in which they were bought. This assists with coordinating suitable expenses against incomes. Cost should be resolved dependent on how the stock is estimated yet most stock is esteemed at the lower of cost or net feasible worth. A section should be made to book the fitting measure of stock dependent on the valuation. Revelations should be made in the budget reports that depict things, for example, reason for valuation, technique for how the expenses were resolved and any significant misfortunes in stock expense. (1) AGUAMAINT, INC. It was Tuesday, January 6, 20X2 and Tom Fasbee had just gotten back from a session of pickleball and lunch. Tom always enjoyed the week after New Year's. The weather was crisp, and his professional practice was underway in earnest. Tom was a partner in the CPA firm of Lake & Lock, a regional accounting firm headquartered in St. Louis. Tom always felt he was born to be an accountant and loved his job. His messages included a call from Nick Riley at Aguamaint, Inc. He and Nick were members of a local athletic club and Nick had just beaten him in two consecutive games. Tom was fairly certain that Nick had called to gloat a little. They had known each other about five years and enjoyed a healthy rivalry in both tennis and pickleball. Lake & Lock had a professional relationship with Nick and his family. It began in late 20X0 when Nick's father passed away and the firm helped settle the estate. Nick and his three sisters each received about $100,000 as their settlement. Nick was a mechanical engineer and was head of maintenance at a fair-sized chemical plant. Ray Ballard, a close friend of Nick’s, managed the City Water District. Both men were recognized experts in hydraulics. For several years, Nick and Ray had discussed the market potential of providing hydraulic maintenance services on a contract basis to water districts, chemical plants, refineries, and pipeline pumping stations throughout the Midwest. Both men were convinced that it was more efficient for these enterprises to outsource maintenance services. With Nick's inherited wealth, the possibility of such a business arrangement became more real. The results of a market study proved to be quite promising, and preliminary negotiations resulted in seven maintenance contracts. So in early 20X1, Nick and Ray decided to incorporate a new company in the State of Missouri and named it Aguamaint, Inc. Ray thought it best to keep expenses as low as possible in the first couple of years, so called his cousin Melba Sanders to ask if Aguamaint could rent the empty warehouse she owned. She had been thinking about tearing the building down, but was happy to provide the space to Ray, at least for a while. Nick and Ray set up both their corporate office and maintenance shop in the warehouse. Melba was not interested in owning stock in the company, so they agreed on a cash price for the monthly rent and signed an agreement. The seven new maintenance contracts called for monthly fee payments that were billed and collected after the work was completed at month end. The fees for all seven contracts were fixed and covered all maintenance work, even though the amount of work performed might vary from period to period. Most customers paid off their accounts within 20 to 30 days. Aguamaint required its clients to purchase the material used in its maintenance services directly from third-party suppliers, who provided product warranties in some cases. Since one of the new contracts was with Nick's former employer, he was able to hire most of his former staff, and after extensive training, Aguamaint initiated operations with a competitive work force. Initial financing for the company came from friends and family, including two of Nick's sisters and Ray's father. Lake & Lock helped Aguamaint set up an accounting system and hired its bookkeeper, Jerry Loos. Tom returned Nick's call, and while Nick did gloat about his pickleball triumphs, he also had something else in mind. More contracts were about to materialize, but there was a need for additional financing to support equipment purchases. Aguamaint currently was operating with two rented crew trucks. The trucks were rigged with tooling, but not to the specifications necessary for efficient long-term operations, and they were not exactly new. Trucks with specially designed tooling would be required to handle the new contracts. So, Aguamaint decided to buy two new trucks with customized rigging. Other modifications would be added later in the company's shop, depending on future contract needs. To finance the truck purchases, Nick and Ray decided to approach Midwest Regional Bank about securing a loan commitment. They quickly learned that the bank required the company to provide certain financial information before making a loan decision. Jerry Loos had prepared financial statements as of December 31, 20X1, the end of the company's fiscal year. However, the bank wanted a CPA firm to provide assurances on the integrity of the financial statements in the form of a review. Tom said that Lake & Lock would be glad to do the work and could begin the next afternoon. Tom also got permission to contact Aguamaint's loan officer, Regina Sontag, to be sure he knew if the bank needed information in addition to the review, and if a review would actually meet their needs