Minicase 1

Minicase 1
Art Specialist, Inc.
Jefferson Jerome is interested in purchasing “Art Specialists, Inc.”, an auction house. The company receives the right to sell art, but not to purchase the art themselves, for a 5% commission. Art Specialists rents office space and holds its auctions at local hotels.
Art Specialists, Inc.
Unadjusted Trial Balance
December 31, 2009
$ 65,000.00
Accounts receivable
$ 36,000.00
$ 8,000.00
$ 53,000.00
Accumulated Depreciation
$ 14,500.00
Accounts payable
$ 5,600.00
$ 50,000.00
Capital stock
$ 25,000.00
Retained earnings
$ 84,900.00
Commission income
$ 250,000.00
Rent Expense
$ 20,000.00
Wages Expense
$ 70,000.00
Auction Expenses
$ 56,000.00
Depreciation Expenses
$ 7,000.00
Membership Expenses
$ 6,000.00
Supplies Expense
$ 9,000.00
$ 380,000.00
$ 380,000.00
As Jefferson’s accountant, you have received the trial balance above as well as the general ledger. The review has found the following errors:
• Year end bank reconciliation showed that the balance should be $40,000. A customer should have been billed for $25,000, but it was recorded as a cash payment of the commission income.
• Membership expenses are not related to the business and should be shown as a dividend to shareholder.
• Depreciation expense should be $3,500 for the year.
• Supplies expenses failed to record $2,000 in packing supplies used during the year.
• Accounts receivables that have not been billed $10,000.
1. Record the correcting entry.
2. Prepare financial statements
3. Current owners want $200,000 for the business. Jefferson does not want to pay more than Net Worth x 1.5. Should he buy?

Calculate your order
Pages (275 words)
Standard price: $0.00
Client Reviews
Our Guarantees
100% Confidentiality
Information about customers is confidential and never disclosed to third parties.
Original Writing
We complete all papers from scratch. You can get a plagiarism report.
Timely Delivery
No missed deadlines – 97% of assignments are completed in time.
Money Back
If you're confident that a writer didn't follow your order details, ask for a refund.

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
Power up Your Academic Success with the
Team of Professionals. We’ve Got Your Back.
Power up Your Study Success with Experts We’ve Got Your Back.
WeCreativez WhatsApp Support
Our customer support team is here to answer your questions. Ask us anything!
👋 Hi, how can I help?