SAMPLE TAXI COMPANY. FINANCIAL STATEMENTS (Unaudited - See Notice to Reader)

Transcription

1 FINANCIAL STATEMENTS MARCH 31, 2015

2 MARCH 31, 2015 TABLE OF CONTENTS Page NOTICE TO READER 1 FINANCIAL STATEMENTS Balance Sheet 2 Statement of Retained Earnings 3 Statement of Income 4 Statement of Cash Flows 5 Notes to the Financial Statements 6-7

3 DOBSON CHARTERED PROFESSIONAL ACCOUNTANT Pine Street North, Timmins, Ontario P4N 6K6 Telephone (705) Fax (705) admin@ddobson.ca David M. F. Dobson,, CA, LPA, B. Comm. NOTICE TO READER To the Directors of Sample Taxi Company On the basis of information provided by management, I have compiled the balance sheet of Sample Taxi Company as at March 31, 2015 and the statements of income, proprietor's capital, and cash flows for the year then ended. I have not performed an audit or a review engagement in respect of these financial statements and, accordingly, I express no assurance thereon. Readers are cautioned that these statements may not be appropriate for their purposes. Timmins, Ontario June 29, 2015, LICENSED PUBLIC ACCOUNTANT 1.

4 BALANCE SHEET AS AT MARCH 31, 2015 CURRENT ASSETS Cash $ 45,000 $ 40,000 Accounts receivable 23,000 20,000 Inventory 5,500 4,000 Prepaid expenses and sundry assets 4,000 - Income taxes recoverable ,700 64,000 LONG -TERM INVESTMENTS 416, ,972 PROPERTY, PLANT & EQUIPMENT (Note 2) 40,167 48,555 GOODWILL 1 1 $ 534,280 $ 591,528 CURRENT LIABILITIES Accounts payable and accrued liabilities $ 15,000 $ 12,000 Government Remittances 4,000 2,000 Income taxes payable - 65,000 Shareholder loan 195, , , ,570 SHAREHOLDERS' EQUITY Capital Stock (Note 3) 8 8 Retained Earnings 320, , , ,958 $ 534,280 $ 591,528 The appended notes are an integral part of these financial statements. 2.

5 STATEMENT OF RETAINED EARNINGS RETAINED EARNINGS, BEGINNING OF YEAR $ 284,950 $ - NET INCOME 53, ,753 LESS - REFUNDABLE TAXES (Note 4) (1,451) (36,803) 336, ,950 DIVIDENDS 25,205 60,000 ADD - DIVIDEND REFUND (Note 4) 8,402 20,000 RETAINED EARNINGS, END OF YEAR $ 320,191 $ 284,950 The appended notes are an integral part of these financial statements. 3.

6 STATEMENT OF INCOME REVENUE $ 230,000 $ 185,000 COST OF SALES 30,000 25,000 GROSS PROFIT 200, ,000 OPERATING EXPENSES Salaries and wages 85,000 80,000 Amortization 13,738 6,739 Repairs and maintenance 10,000 - Automotive 8,500 5,000 Employee benefits 7,500 6,000 Insurance 7,500 7,000 Supplies 7,000 4,000 Rent 4,000 4,000 Advertising and promotion 2,500 1,500 Professional fees 1,500 3,000 Interest and bank charges 1, Telephone Office supplies Meals and entertainment Licences and fees Travel Delivery Bad debts , ,939 INCOME FROM OPERATIONS 49,137 39,061 OTHER INCOME 14,644 14,999 GAIN ON DISPOSAL OF ASSETS - 355,500 INCOME BEFORE INCOME TAXES 63, ,560 INCOME TAX PROVISION 10,286 47,807 NET INCOME $ 53,495 $ 361,753 The appended notes are an integral part of these financial statements. 4.

7 STATEMENT OF CASH FLOWS CASH PROVIDED BY (USED FOR): OPERATING ACTIVITIES Operations Net income $ 53,496 $ 361,753 Items not affecting cash Amortization 13,738 6,739 Gain on disposal of assets - (355,500) 67,234 12,992 Changes in non-cash working capital balances Accounts receivable (3,000) (15,166) Inventory (1,500) (6,400) Prepaid and sundry (4,000) - Accounts payable and accrued liabilities 3,000 12,000 Income taxes payable (65,000) 65,000 Government Remittance 2,000 2,000 (68,500) 57,434 (1,266) 70,426 FINANCING ACTIVITIES Issue (redemption) of Class B shares - 8 Dividends (25,205) (60,000) Refundable taxes (1,651) (36,803) Dividend refund 8,402 20,000 (18,454) (76,795) INVESTING ACTIVITIES (Increase) decrease in due from shareholder (32,490) 232,874 (Increase) decrease in long-term investments 62,560 (478,972) Proceeds on disposition on assets held under capital lease - 473,336 Acquisition of property plant and equipment (5,350) (239,911) 24,720 (12,673) INCREASE (DECREASE) IN CASH FOR THE YEAR 5,000 (19,042) CASH, BEGINNING OF YEAR 40,000 59,042 CASH, END OF YEAR $ 45,000 $ 40,000 The appended notes are an integral part of these financial statements. 5.

8 NOTES TO THE FINANCIAL STATEMENTS DESCRIPTION OF THE BUSINESS The business was incorporated under the laws of the Province of Ontario on January 1, 2014, and operates as a fictional taxi fleet servicing Northern Ontario located in Timmins, Ontario. 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Revenue recognition Revenue is recorded at the completion of each job. (b) Inventory Inventory is valued by management estimate without count or costing at the lower of cost and net realizable value, the cost being determined using the first in, first out method. (c) Property, Plant & Equipment Property, Plant & Equipment is recorded at cost. Amortization is provided at rates calculated to write-off the assets over their estimated useful lives. In the year of acquisition, amortization is reduced by one-half. The company calculates amortization via the diminishing balance method, at the indicated rates, for the following asset groups: Tools and Equipment - 20% Taxi Cars - 30% Taxi Vans - 30% Computer - 55% 6.

9 NOTES TO THE FINANCIAL STATEMENTS 2 PROPERTY, PLANT & EQUIPMENT Accumulated Net Net Cost Amortization Tools and Equipment $ 29,795 $ 22,831 $ 6,964 $ 7,728 Equipment 5, ,815 - Taxi Cars 18,941 7,671 11,270 16,100 Taxi Vans 34,655 17,880 16,775 23,965 Computer 1, $ 89,792 $ 49,625 $ 40,167 $ 48,555 3 CAPITAL STOCK Authorized Unlimited number of seven classes of shares, without nominal value, designated as class A, class B, class C, class D, class E, class F, and class G shares Issued 8 class B shares $ 8 $ 8 4 REFUNDABLE DIVIDEND TAX ON HAND Under the Income Tax Act, the company is classified as a Canadian Controlled Private Corporation and therefore certain taxes paid relating to investment and dividend income are potentially refundable. Accordingly, these taxes are not deducted in computing net income for the year but are charged directly to retained earnings. Refunds of these taxes are recoverable at the rate of $1 for each $3 of taxable dividends paid and are correspondingly credited to retained earnings. During the year ended March 31, 2015, the company paid refundable dividend tax of $1,451, and received dividend refunds of $8,402. The Refundable Dividend Tax on Hand at March 31, 2015 amounts to approximately $9,