[evazok]

My inquiry is sort of complex since it involves analysis of financial statements and its necessary revision. All details regarding that are presented in the attached file. I really appreciate is someone can look into that and provide feedback whether I did this right if not please provide hint/s what needs to be adjusted/changed.

Thank you for your help ;)

Ek

[morgaine300]

NOTE: Fortunately I can still edit this. As you'll see in the follow-up post I figured this out. You might want to read some of this for info, but you can skip over like the 3rd & last paragraphs to save time, cause they no longer mean anything.
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I have made an attempt to look at this, and after looking at several of the items of information they are giving you, there is an obvious really big problem going on here. I don't necessarily mean with you, because I'm not sure if you're misinterpreting or there's something weird about the problem.

It's giving you statements as of 12/31/07. Since all the information they are giving you seems to pertain to adjusting entries, then we can assume these are unadjusted statements. However, all the references they are making to "this happened on Jan 4" and "this happened on Oct" should already have been recorded and should already be reflected in these statements. i.e. How can you have a statement dated 12/31/07 that doesn't include the payment that was made on Jan 4 for interest? So all those references to things that happened during the year should not have journal entries being made.

I originally thought it was you screwing this up. (And maybe it still is.) But... there's some things on the statements themselves that make me seriously wonder. For instance, there's an unearned service revenue from October. If that was already recorded in October, there should be a balance of 48,000 in an Unearned Service Revenue account. There isn't. It doesn't exist. So then I wonder: does the problem actually want you to record all these items they're making reference to? It doesn't make any sense, because why should statement reflect ALL other entries made during a year, but NOT reflect just these specific items? Of course, it could be that the 48,000 was recorded in revenue where it doesn't belong, and the adjusting entry actually consists of removing the portion that belongs to the future. That can happen, but books don't normally do things like that. That also means making an assumption on my part that I'd prefer not to make -- not if I want to give you correct answers.

So I stopped. I wasn't sure how to answer it and I felt like I was wasting time when I don't know how to answer. I can, however, make certain comments on each item. i.e. I might not be able to tell you what exactly it is the problem wants you to do, but I can simply comment on the items themselves. (Like for instance that 3 & 4 are both wrong, no matter how you look at it. I can tell that, regardless of the other unknowns.) That would essentially mean not looking at the statements at all and just dealing with the known adjusting entry, and there are actually certain ones I still couldn't answer.

And you can also possibly help out. For instance, can you check your book and see if perhaps they have a habit of putting things like prepaid revenues into the revenue account when it's paid. Or, say, putting insurance directly into the expense, and then adjusting it back to the prepaid later. That is another method of doing it -- it just has to be adjusted differently. I don't necessarily agree with it, but doesn't mean the book doesn't do it.

[morgaine300]

Sigh. Went to just make some notes on the file and noticed where it said "Barber-Williams recorded this transaction as" on that deferred revenue thing. I thought that entry was what you had done. No, it's how it had been recorded at the time, which answers my question, and tells me why there's no Unearned Service Revenue.

Which essentially clears this up for me. I'm not sure whether you'll consider it good news or bad news that this means it's you who is screwing up. Bad that you're screwing up, but good that at least now I know what's going on, can work through it and tell you what's wrong.

I will get back to this some time tomorrow (Tues) when I have time.

[morgaine300]

Actually... it didn't turn out being that long so I finished what I had to say. I added a sheet and made notes on it to help you try to make some corrections. If you don't understand something, you can ask here, or add comments under my notes, or whatever you want to do. Make an attempt to make the corrections and then I'll take another look.