Identification+of+Errors+in+Financial+Statements+and+Preparation+of+Revised+Statements

Identification+of+Errors+in+Financial+Statements+and+Preparation+of+Revised+Statements

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ay City Bombers, Inc., is a minor league baseball organization that has just completed its first season. Bay City Bombers, INC. Income Statement For the Year Ended December 31, 1995 Advertising revenue $100,000 $940,000 Rent expense $210,000 $695,000 Bay City Bombers, INC. Statement of Retained Earnings For the Year Ended December 31, 1995 Beginning balance, January 1, 1995 $ -0- Add: Net income for 1995 245,000 Deduct: Cash dividends paid in 1995 (40,000) Ending balance, December 31, 1995 $205,000 Bay City Bombers, INC Balance Sheet At December 31, 1995 Cash $5,000 Notes payable $50,000 Season tickets 140,000 Additional owners' capital 80,000 Advertisers 100,000 Parent club's equity 125,000 Auxiliary assets 80,000 Retained earnings 205,000 Total assets $500,000 Total liabilities and owners' equity $500,000 Additional information: 1. Single game tickets sold for $4 per game. The team averaged 1,500 fans per game. With 70 home g 2. No season tickets were sold during the first season. During the last three months of 1995, however, 3. Advertising revenue of $100,000 resulted from the sale of the 40 signs on the outfield wall at $2,500 4. Bay City has a working agreement with one of the major league franchises. The minor league team Revenues: Single game ticket revenue $420,000 Season ticket revenue $140,000 Concessions revenue $280,000 Expenses: Cost of concessions sold $110,000 Salary expense - players $225,000 Salary and wage expense-staff $150,000 Net Income $245,000 Assets Liabilities and Owners' Equity Accounts receivable Capital stock 40,000 Equipment 50,000 Player contracts 125,000
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5. In addition to the cost described in part 4, Bay City directly pays each of its 25 players a $9,000 sala 6. The items on the balance sheet entitled Auxiliary Assets on the left side and Additional Owners' Cap 7. The $50,000 note payable resulted from a loan that was taken out at the beginning of the year to fin 1. Identify any errors that you think the controller has made in preparing the financial statements.
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Identification+of+Errors+in+Financial+Statements+and+Preparation+of+Revised+Statements

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