Chapter 4, Problem 4.12BYP

To determine

Balance sheet:

Balance sheet is a financial statement prepared to report the financial position of the business. The balance sheet contains assets, liabilities and shareholders' equities of the business as on given date.

Income statement:

Income statement is one form of financial statement that shows the net income earned or net loss suffered by a company through reporting all the revenues earned and expenses incurred by the company over a specific period of time. An income statement is also known as an operations statement, an earnings statement, a revenue statement, or a profit and loss statement. The net income is the excess of revenue over expenses.

To identify: The deficiencies in the presentation of the balance sheet and the income statement prepared by the company’s controller and to give the list of items which require additional disclosure either on the face of the statement  or note.