Hamilton's Electronics Services, Inc

Abstract

David Hamilton has opened Hamilton's Electronics Services, Inc. During the first year, he was too busy to keep much in the way of accounting records. Early in January of the following year, he hired a local CPA to reconstruct, in summary form, all the transactions that had occurred in his business during the previous year. Excerpt UVA-C-2380 Sept. 19, 2016 Hamilton's Electronics Services, Inc. David Hamilton had worked as the senior technician at a large electronics sales and service company for more than 15 years. One day in early December, as he was driving to work, he came to the realization that he was tired of working for a big company. In fact, he decided that what he really wanted was to be self-employed. Knowing that if he gave himself time to think about all the risks and frustrations of starting a business, he would likely change his mind, he wasted no time in getting to work. Upon arriving at work, he handed in his resignation that would become effective in two weeks. About one month later, Hamilton announced the opening of Hamilton's Electronics Services, Inc. (Hamilton's), an electronics repair company servicing all makes and models of electronic equipment. Throughout that first year, Hamilton was extremely busy and never seemed to have the time to keep much in the way of accounting records. Early in January of the following year, Hamilton hired Janet Lucas, a local CPA, and asked her to reconstruct, in summary form, all the transactions that had occurred in his business during its first year of operations. Hamilton provided Lucas with four boxes full of invoices, bank statements, and a large quantity of miscellaneous business-related information. He hoped that she would eventually be able to provide him with an income statement for his first year of operations and a balance sheet at the end of that year. Lucas was somewhat skeptical regarding the outcome of her new engagement, and so she decided to spend the following weekend working on it. To her surprise, it appeared that the boxes contained everything she needed to complete a summary analysis of transactions, to transfer all the data into individual accounts, and to prepare an income statement and a balance sheet. . . .