You are an Analyst for the professional service firm, BUSI 1043 LLP.

Instructions:In order to complete your case analysis successfully, items you should consider are as follows:identify the role you are playing;assess the financial reporting landscape, considering the user needs, constraints, andbusiness environment;identify the issues;analyze the issues (qualitatively and quantitatively); andprovide a recommendation for each issue identified in the case.An average grade will come from you answering all questions with basic coverage and accuracy,showing all your work. Additional points come from including greater detail, astute, informedcommentary where appropriate and connections to readings and other content.Respond in a single Word doc (or comparable text editor).Henrietta’s Pine BakeryBackgroundYou are an Analyst for the professional service firm, BUSI 1043 LLP. Your firm specializes inproviding a wide variety of internal business solutions for different clients. Given the outstandingfeedback you received on your first engagement working for Big Spenders Inc., a SeniorManager in the Financial Advisory group requested your support on a compilation engagement.Additional InformationHenrietta’s was established in 1963 when it first opened its doors in Dwight, Muskoka onhighway 60. Over the past 50 years, there have been four owners and is currently owned byCarine & Geoff Harris who incorporated and took over the store on January 1, 2013. Their sons,Kyle and Nicholas have been an intricate part of the business from dishwashing to head bakers.Henrietta’s has grown over the years with the addition of new items all the time, but the “StickyBuns and Clouds” remain the most popular items amongst the 150 varieties of breads andpastries.Henrietta’s runs out of 90 square meters (1,000 share feet) of space. It has one entrance into thebakery and doors leading out to highway 60. Henrietta’s pays $5,000 per month for the rental ofthe space. Carine and Geoff were able to negotiate with the landlord and were not required topay the first month’s rend in advance. All of the rental payments are current and up to date. Forthe last two years, Henrietta’s has had a very reliable accountant prepare its year­end financialstatements and everything has been correct. This year, Henrietta’s accountant retired and Geoffdid the best he could recording his own financial information. For the information he was not sureabout, he kept all of the required supporting documentation. Geoff hired your firm, BUSI 1043LLP to prepare his financial statements for the year. Geoff supplied you with his unadjusted trialbalance and the information in Exhibit I to assist you.Supplementary information:The amount currently sitting in prepaids arose due the insurance policy last year. Geoffdidn’t know how to correct it, so he left it. This year’s insurance policy was purchased onNovember 1 for $9,000. The policy runs from November 1 to October 31 of each year.Geoff has a note that he owed $900 in wages to his employees for the period endingDecember 31st.The loan was incurred when the bakery was opened. The loan carried an interest rate of8%. The interest is payable two months after year end and the principal is due in 2019.Henrietta’s will sometimes book special events with small organizations that are allowedto pay after the event has taken place. On December 29th, a small company had a gatheringat the bakery. The company was billed $1,089 and has 30 days to pay it. Geoff has not yetrecorded this in his financial records.Henrietta’s declared a dividend of $5,000 on December 30th.Geoff didn’t know how to record amortization for the year and so left it for you to record.Amortization for all assets is charged using a straight­line method by taking the cost of theasset and dividing it by its expected useful life. The assets have expected useful lives asfollows:oComputer: 5 yearsoBakery equipment: 10 yearsoFurniture and fixtures: 20 yearsThe information shows that Henrietta’s owes $400 for a telephone bill and $400 forelectricity for December. These amounts have not been recorded yet.Exhibit IHenrietta’s Pine BakeryUnadjusted Trial BalanceDecember 31, 2015Account NameCashDebitCredit$35,0005,600Food Inventory21,000Merchandise Inventory62,500Accounts ReceivablePrepaids3,40030,00012,00090,00018,000150,000Accumulated Amortization – Furnitureand Fixtures15,000Accounts Payable18,000Accrued LiabilitiesInterest PayableDividend PayableLong­term Loan220,000Common Shares50,000Retained Earnings22,000Food Revenue468,500Internet Revenue127,000Merchandise Revenue103,000240,000Internet Expense54,000Electricity Expense65,000Telephone Expense20,0000200,0009,000ComputersAccumulated Amortization –ComputersBakery EquipmentAccumulated Amortization – BakeryEquipmentFurniture and FixturesFood ExpenseInterest ExpenseSalary ExpenseInsurance ExpenseSupplies ExpenseDepreciation ExpenseRent Expense8,00060,0001,053,5001,053,500RequiredBased on the information you have, prepare the adjusting journal entries, an adjusting trialbalance, the statement of earnings (income statement), statement of financial position (balancesheet), and statement of retained earnings. After you have completed the statements, preparethe closing journal entries and the posting closing trial balance. Ensure you show all of yourwork, and prepare proper journal entries and properly formatted financial statements.EvaluationThe following rubric indicates those areas you should be focusing on in preparing yourassignment, and how the professor will weigh these components relative to one anotherActivity/Competencies Demonstrated% ofTotalGrade1.Identification and Analysis of Issues (80%)a. Adjusting Entries/17b. Adjusting Trial Balance/10c. Balance Sheet/28d. Statement of Operations/13e. Statement of Retained Earnings/6f. Closing Entries/16g. Post­Closing Trial Balance/10Total/100