Daphne’s Catering Ltd case writing
To: Joe Insalacco
From: Accounting Advisor
RE: Accounting issues on the financial statements of Daphne’s Catering Ltd.
As an accounting advisor, it is my role to examine the financial statements of Daphne’s Catering Ltd. to provide recommendations on accounting issues and give explanations regarding the purchase of DCL.
Users/Objective
You, Joe Insalacco, are a potential buyer of Daphne’s Catering Ltd. With the financial statements, you are looking to evaluate the performance to determine whether this is a company worth purchasing. You are not familiar with the accounting matters of DCL but your objective is to minimize net income so that you can purchase DCL for a lower price.
Daphne Flatt is the owner and CEO of Daphne’s Catering Ltd. We can assume that she is the preparer of the financial statements. She is not an important use of the financial statement because she operates the business. However, for the time being, she is interested in the financial statements because she has the objective of maximizing net income to sell her business at a higher price.
CRA (Canada Revenue Agency) is another user of the financial statements because they will look to see if the business is making the correct accounting decisions to record revenue and expenses according to the standards stated in Income Tax Act; not taking any illegal steps to avoid paying tax.
I have concluded that you are the most important user of financial statements, because you are considering purchasing DCL. Since your opinion and questions about the DCL’s financial statements are the most important at this point in time, you are the primary user of the financial statements. In addition, your primary objective would be to minimize net income to minimize the purchase price of DCL.
Constraints
Since Daphne’s Catering Ltd. is a private company, it will follow ASPE (Accounting Standards for Private Enterprise) to avoid accounting complication and high costs of IFRS. It is not to be mistaken
From: Accounting Advisor
RE: Accounting issues on the financial statements of Daphne’s Catering Ltd.
As an accounting advisor, it is my role to examine the financial statements of Daphne’s Catering Ltd. to provide recommendations on accounting issues and give explanations regarding the purchase of DCL.
Users/Objective
You, Joe Insalacco, are a potential buyer of Daphne’s Catering Ltd. With the financial statements, you are looking to evaluate the performance to determine whether this is a company worth purchasing. You are not familiar with the accounting matters of DCL but your objective is to minimize net income so that you can purchase DCL for a lower price.
Daphne Flatt is the owner and CEO of Daphne’s Catering Ltd. We can assume that she is the preparer of the financial statements. She is not an important use of the financial statement because she operates the business. However, for the time being, she is interested in the financial statements because she has the objective of maximizing net income to sell her business at a higher price.
CRA (Canada Revenue Agency) is another user of the financial statements because they will look to see if the business is making the correct accounting decisions to record revenue and expenses according to the standards stated in Income Tax Act; not taking any illegal steps to avoid paying tax.
I have concluded that you are the most important user of financial statements, because you are considering purchasing DCL. Since your opinion and questions about the DCL’s financial statements are the most important at this point in time, you are the primary user of the financial statements. In addition, your primary objective would be to minimize net income to minimize the purchase price of DCL.
Constraints
Since Daphne’s Catering Ltd. is a private company, it will follow ASPE (Accounting Standards for Private Enterprise) to avoid accounting complication and high costs of IFRS. It is not to be mistaken