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I need financial statements and memo created for my final accounting case assignment

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I need financial statements and memo created for my final accounting case assignment. All instructions are attached with photos. I have numbered each photo in order for easy following.

Olivia’s Music Studio (OMS)

Olivia Lewis, a passionate pianist and teacher, has over 20 years of teaching experience. She started Olivia's Music Studio (OMS) on January 1, 2021. OMS, located in Toronto. ON, offers piano and music theory lessons and sells instrument accessories such as metronomes, adjustable benches, music stand lamps, and cleaning kits and tools.

After what Olivia feels was a successful first year, she is eager to see how the company has performed. The company’s year-end is December 31.

She has asked you to create a set of financial statements, excluding the statement of cash flows, as she feels she has a good understanding of her cash spending as compared te her budget. Olivia will use these statements for her own use to assist with planning for the future of the company.

Exhibit 4 inctudes an unadjusted triai balance at December 31. 2021.

Exhibit 2 includes information on 2021 transactions which require analysis and recording using

Accounting Standards for Private Enterprises (ASPE).

Required:

1. Prepsre the journa! entries for 2021, including any required year-end adjusting entries. Provide sn explanation of why each entry is required and how it was calculated. The campany prepares annua! adjusting entries.

2. Prepare the classified Statement of Earnings, Statement of Retained Earnings, and Statement of Financial Position, for the period ended and as at December 31, 2021.

3. Prepare a professional memo te Olivia Lewis outlining 2 internat control weaknesses. Include an explanation of what can go wrong as 3 result of each weakness, and recommended changes.

Required Memo Format

TO:

FROM:

DATE:

RE:

internal Control weakness 1

Description of weakness

Explanation of what can go wrong as a result of the weakness

Recommended change

Interna! Controi weakness 2

Description of weakness

Explanation of what can go wrong as a result of the weakness

Recommended change

Consult the course textbook page 331-338 for guidance on internal control.

What are control weaknesses?

Control weaknesses may relate to the contro! of cash or any other assets that a company has.

Companies should have internal contrals in ptace to protect their assets. Controls may also relate to processes and procedures of a company. When internal controls are missing or weak, a company is said to have an “internal control weakness”.

Example of internal control weakness for a toy manufacturer:

Description of weakness: The back door tc the company’s warehouse where inventory is stored is kept open and unlocked throughout the day. every day.

Explanation of what can go wrong as a result of the weakness: Outsiders/unsuthorized people can get into the warehouse and steal inventory

Recommended change: Ensure the back door is kept locked at al! times and provide entry only to authorized people such as employees and delivery personnel.

Example internat control weakness for a farming business:

Description of weakness: Farm employees are allowed one free bucket of strawberries per week during strawberry season. Employees can pick strawberries from the field and fill a bucket themselves.

Explanation of what can go wrong as a result of the weakness: Farm employees may take more strawberries than onty one bucket a week which will result in the farm giving away more free strawberries than it intended and this will reduce profit for the business.

Recommended change: Implement a system that farm employees must sign off a master list when they have taken their one free bucket of strawberries a week. A manager should monitor

the fist as well as watch for employees who appear to be taking 5 bucket of strawberries when they have already signed off on the master list and should be reprimanded if found doing so.

You may be able to think of alternate implications and recommendations for the internal control weaknesses above; that's fine as there is not only one right answer.

There are several control weaknesses in the OMS case. Find any 2 and use the same format as above to explain each one separately.

Exhibit 2

Additional information

1. OMS uses a perpetual inventory system. Below is a breakdown of inventory on hand at

December 31, 2021:

Quantity Unit Cost Total Cost Net Realizable Value

Inventory - Benches 20 $200 $4,000 $3,800

Inventory - Metronomes 40 $50 $2,000 $2,250

Inventory - Lamps 25 $20 $500 $550

Inventory - Cleaning kits 65 $35 $2.275 $2,150

2. The company ran out of a popular lamp. They placed an order for 30 of these lamps on account at a cost $20 each on December 28, 2021. Terms of this order were 2/10, n/30 FOB shipping point. They received an email notifying them of shipment on December 31, 2021.

Olivia looked forward to replenishing this popular item and adding it to inventory upon

receipt.

3. Acount of supplies was also done on December 31, 2021 where $1.550 worth of supplies was found on hand.

4. An insurance policy was purchased in March 2021 for the next 12 months starting April 1,

2021.

5. Olivia was ecstatic when the custom storefront sign arrived on April 1. 2021; just in time to

be put up before the store's official grand opening! She hopes that the sign will last for the next 15 years.

Olivia sure had fun designing and setting up the store! The furniture and fixtures she invested in (all of which was incurred within the first couple days of January) are expected to last for the next 10 years.

Olivia wanted to ensure that she coutd monitor the store's operations and her teaching schedule. As such, she invested in both a laptop and tablet. Everything was purchased on

January 1, 2021 when she took advantage of some Boxing Day sales prices. She expects that both the laptop and tablet would be valuabie for the next 5 years where she would need to expect to upgrade.

Straight-line method is used for all non-current assets.

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