My assignment file is attached below. I need the assignment completed by 4:30pm eastern standard time today June 10th. For some questions I need my student number which ends in a 6.
1. Award: 0.00 points0.00 points Tanya’s Tutoring Services Ltd.Tanya’s Tutoring Services Ltd. Income StatementIncome Statement For the month April 2022For the month April 2022 Revenue Services 0.00 Expenses: Cost of Goods Sold 0.00 Bank Service Expense 40.00 Interest Expense 30.00 Phone Expense 45.00 Income Tax Expense 0.00 Net Income (loss) (115.00) Tanya’s Tutoring Services Ltd.Tanya’s Tutoring Services Ltd. Statement of Retained EarningsStatement of Retained Earnings April 30April 30thth 2022 2022 Retained Earnings, April 1st 2022 (345.00) plus: Net Income (115.00) less: Dividends 0.00 Retained Earnings, April 30th 2022 (460.00) Tanya’s Tutoring Services Ltd.Tanya’s Tutoring Services Ltd. Statement of Financial PositionStatement of Financial Position April 30April 30thth 2022 2022 Current Assets: Cash 10,674.00 Prepaid Booklets 531.00 Non-Current Assets: Organizational Costs 5,600.00 16,805.00 Liabilities: Interest Payable 120.00 Phone Payable 45.00 Income Tax Payable 0.00 Organizational Costs Payable 5,600.00 Non-Current Liabilities: Loan Payable 1,500.00 Shareholder's Equity: Share Capital 10,000.00 Retained Earnings (460.00) 16,805.00 2. Award: 0.00 points0.00 points Term Project Part IITerm Project Part II Accompanying material for the ebook Introduction to Financial Accounting in the 21st Century – Gaber & Porporato, 5th Edition McGrawHill Term Project: Part IITerm Project: Part II Bookkeeping for a small business organizationBookkeeping for a small business organization Case: Tanya’s Tutoring Services May 2022Case: Tanya’s Tutoring Services May 2022 Tanya Smart was a recent BCom graduate of York University majoring in accounting. After obtaining her CPA designation she considered her options in terms of what she wanted to do with her life and decided that she would like to devote part of her time helping people and one way she could do that was to tutor students still in school. Tanya had $10,000 in accumulated savings and also had a promise from her widowed mother to loan her an equivalent amount if she needed start-up capital. With her mom’s best wishes she decided to take the plunge and start a tutoring service. In January of 2022 she contacted a lawyer for advice about incorporating. Tanya had heard stories from her accounting professors about students who failed that tried to sue their professor and she certainly did not want to expose herself to that kind of risk. The legal firm LA Law provided the necessary legal advice and did all the necessary paper work to incorporate [1] as a Canada Business Corporation. Initial capitalization allowed for 10,000 no par value shares. Tanya, her lawyer and her mom were named as Directors of the Corporation which was called Tanya’s Tutoring Service Ltd. The lawyers also checked that the name was not already registered and she paid additional to register her Internet domain website URL as www.tanyatutor.ca. Tanya contributed her $10,000 in exchange for 1,000 of the shares. This was deposited into a new corporate bank account she set up with TD Canada Trust on January 10, 2022. The bank account was a standard commercial chequing account that gave cheques returned with monthly statements for a fee. She works in a family-owned accounting practice that is not very busy outside the tax season, so she worked out an arrangement with the name partners allowing her to rent the meeting room for a set number of hours in the months of May to November. The hourly rent was not cheap, but Tanya determined this approach will be less risky that renting her own space and buying all the needed furniture and communication technology. Tanya remembered her professor’s warning that 65% of new businesses in Canada fail in the first year because of cash flow problems. She decided to take advantage of her mom’s offer and took the loan by giving back a promissory note that bore interest at 24% payable monthly. The note had no stated maturity date but either party could give 3 months notice to end the loan. Tanya classified this as long term debt but since her firm was not yet subject to audit and all the hassles of full fledged GAAP compliance, she ignored the CICA requirements to present the present value the liability. She told her mom that although interest would be accrued monthly, she would only hand her an interest cheque every six months. Next step for Tanya was to put together a business plan. First of all, since her expertise was clearly in accounting, the business would initially confine itself to the accounting discipline. Tanya’s Tutoring Service (TTS) would offer the following services to students: 1. Private tutoring at $50 an hour. 2. Group sessions at $30 an hour. 3. Preparation, administration and marking of mock exams at $250 per incident. 4. Sale of textbook and class notes summaries for $500 each. 5. Provision of career placement services where the customer would be coached on how to dress, prepare and conduct themself in job interviews and advice on how to properly set up a resume. Fee for this service was $300 per 2-hours session. Tanya consulted with Hortense, her legal advisor at LA Law (who was also a boyfriend and very generous with free advice) and was told that in Ontario only the sale of the course notes would be subject to HST as the other items fell under the educational counseling rubric. Hortense also informed Tanya that as a GST/HST registrant, her HST reporting period would be annual as it is the one that requires the least frequent filing of GST/HST returns available for her threshold amount (annual sales of less than $1,500,000). Tanya’s Tutoring Ltd. has a December 31 fiscal year-end, therefore the due date of her tax return is June 15 of the subsequent year. However, any HST owed is payable by April 30 of the subsequent year. The next step was hiring of tutors. She was able to use her contacts in the Student Accounting Society to get plenty of names of A students interested in getting such an activity on their own resume. Hortense pointed out that as long as these people were deemed casual labour instead of employees and were not allowed to work more than 15 hours each per week, she would avoid the huge aggravation of having to make payroll deductions on their behalf. Tanya developed a contact list of 22 people and the courses each could tutor. The mock exams would be compiled by herself during her spare time and administered online through her website. As for the textbook and class summaries she would use the copious notes she made while taking each course to make these booklets. INSTAPRINT agreed to “publish” these at $26.55 per copy + HST and in April she placed an initial order for 100 booklets. While Tanya felt quite comfortable running her own website, designing it was another matter. She decided to engage the services of a gifted computer science student who put together a fabulous website with all the necessary interactive software. Since this was a cash transaction no mention was made of HST. She did record the transaction on May 3rd on her books as an intangible asset to be amortized straight line over two years. Tanya knew this was probably supposed to be expensed immediately but since her expenses were going to be so high in relation to revenues in the start up year, she felt that her actions were justifiable. In terms of setting up her accounting system Tanya decided on the following records: Chart of Accounts General Journal used for all adjusting and oddball entries Sales Journal Disbursements Journal Sales were handled in the following fashion. Students would sign up for “services” on the website which would show the available times and successful bookings. Students had the choice of prepaying with credit cards or paying at the session. Revenues were recognized at the moment of the session. If a session was to be paid in cash, non shows at the sessions were not recognized as revenues and students were blacklisted from using the company again. The credit card company (VISA) charged 3% of sales receipts for its processing services. For simplicity, Tanya recorded the sales when she made the bank deposit of the cash payments and when Visa made the deposit in her bank account. Occasionally no-show students would show up later with plausible sob stories. Tanya would take their money for the new session adding a $10 processing fee to the new billing. Tanya of course had other business expenses that were normal for the business and these are reflected in the disbursements journal. Among them are the T-shirts she gives away with each booklet sold to advertise and promote her business activity. The tutoring business kept Tanya hopping and the time just sped by. There seemed to be no end to the need of accounting students for assistance. Tanya got behind on her record keeping. With no activity during the tax season (January to April) she only prepared one financial statement on April 30th, but for May when activities started, she decided to prepare a monthly statement (Balance Sheet, Income Statement and Statement of Retained Earnings but no Cash Flow Statement). Tanya also realized that according to her banking agreement the bank only sent her a bank statement and cheques on request, and none had been requested the last months. She ordered a statement covering the 4 months period leading up to April 30. May was very activity, with many tutoring and other services provided. One event happened near the end of May that left Tanya somewhat distressed and depressed. Several accounting students writing deferred exams in May had signed up for intensive coaching sessions with her but had failed the exam