Draft Report

To: Volunteer Board of BAS

From: CA
Date: August 2

Overview
This report contains the summary of my observations with regards to the accounting, taxation and
financial aspects of Security Plus Inc., a client of the BAS program.

This report is prepared for the volunteer board to use when providing business advice to SP. The
objective is to provide suggestions that benefit the clients business while conforming to all applicable
standards and regulations.

Joe Rush will use the advice from this report to change and improve his business and thus needs
directive and practical suggestions.

Accounting
Revenue recognition
1. Gross vs net monitoring services revenue
2. Revenues earned in this year out of the 36-month contract monitoring services revenue
a. AFDA
3. Recognition of sale of systems, and related costs presentation on income statement

EEDC loan
1. New loan of $20K presentation on balance sheet

Balance sheet
1. Valuation of inventory
2. Presentation: current vs LT

Income statement
1. COGS
2. Installer fees Joes free service
3. Dividends cannot be paid when retained earnings is negative

Taxation
1. Home office deduction
2. Annes salary: can deduct reasonable amount
3. Contractors or EEs: badges of trade, CPP, EI, withholding tax
4. Business tax return: deductible items, loss carry forward

Finance
1. CY CF statement:
a. Loan
b. BS items and IS items
2. Projected CF statement (2 years? Since loan is due over the next 2 years)

MDM
1. Pricing the new Health Alert