jefferson jerome is interested in purchasing ac oart specialists inc ac an auction h 497580

Jefferson Jerome is interested in purchasing Art Specialists, Inc. , an auction
house. The company receives the right to sell art, but not to purchase the art
themselves, for a 5% commission. Art Specialists rents office space and holds its
auctions at local hotels.
Art Specialists, Inc.

Unadjusted Trial Balance

As Jefferson s accountant, you have received the trial balance above as well as
the general ledger. The review has found the following errors:
Year end bank reconciliation showed that the balance should be $40,000.
A customer should have been billed for $25,000, but it was recorded as a
cash payment of the commission income.
Membership expenses are not related to the business and should be
shown as a dividend to shareholder.
Depreciation expense should be $3,500 for the year.
Supplies expenses failed to record $2,000 in packing supplies used during
the year.
Accounts receivables that have not been billed $10,000.
Required:
1. Record the correcting entry.
2. Prepare financial statements
3. Current owners want $200,000 for the business. Jefferson does not want to pay more than Net Worth x 1.5. Should he buy?