Apple Blossom Cologne Company H-4

Federal Income Taxes Payable 1-31-04

12-31-03 FK
Tax Liability Tax Expense
Balance 12-31-02 63,772 ! -
Addition: 2003 taxes 100,000 @ 100,000 @
Payments: 163,772 £
Final payment Jan 2003 on 2002 taxes 63,772 $
First quarter deposit, 2003 taxes 25,000 $
Second quarter deposit, 2003 taxes 25,000 $
Third quarter deposit, 2003 taxes 25,000 $ 138,772 £
Balance 12-31-03, per client 25,000 % 100,000 %

Adjustment to income tax and income tax

liability resulting from audit adjustment
Reference (AJE 18) to record tax adjustment
Federal income tax expense - 23,859 ^
Federal income taxes payable - 23,859 ^
Balance per audit 1,141 £ 76,141 £

INCOME TAX EXPENSE PER AUDIT

15% 50,000 7,500 &
25% 25,000 6,250 &
34% 183,504 258,504 62,391 &
Per audit 76,141 £
Per client 100,000 $
Required adjustment (AJE 18) 23,859 ^

! Telah sesuai dengan saldo per audit 2002 FK

@ Sesuai dengan estimasi beban pajak penghasilan tahun 2003 yang dibuat klien FK
£ Footed FK
$ Telah sesuai dengan slip, voucher, dan jurnal pembayaran pajak dari klien FK
% Telah sesuai dengan saldo per buku klien 2003 FK
^ Terjadi perbedaan saldo beban pajak penghasilan akibat adanya penyesuaian audit lainnya maka diajukan AJE 18 FK
& Rekalkulasi FK
maka diajukan AJE 18 FK
 Apple Blossom Cologne Company K-1
Retained Earnings 1-31-04
12-31-03 FK
Balance 31-12-02 529683 !
Dividends -23125 @
506558 £
Net income 2003, before audit adjustments 318585 $
Balance, 31-12-03 per book 825143 £
Net effect of 2002 audit adjustment - 136,222 %
Balance, 31-12-03, after audit adjustment 688,921 £

! Telah sesuai dengan neraca saldo klien per 2002 FK

@ Sesuai dengan notulen rapat dewan direksi dan skedul H-3 FK
£ Footed FK
$ Sesuai dengan neraca saldo laba rugi klien per 2003 FK
% Hasil akumulasi perbedaan net income per book dengan per financial statement 2003 klien FK
 Apple Blossom Cologne Company
Working Trial Balance-Balance Sheet
12-31-03
Working Per Per
Paper Audit Books Adjustments
Reference 12-31-02 12-31-03 Debit
Assets:
101 Cash-Big City National Bank A-1 513,617 846,541
102 Cash-Second National Bank A-3 5,918 36,968
103 Petty Cash A-7 420 500
105 Account Receivable B-1 139,504 212,705
106 Allowance for Bad Debts B-6 - 11,889 - 19,919 14,330 AJE 3, 4
107 Miscellaneous Receivables E-6 3,750 AJE 11
109 Inventory C-1 873,766 719,647 33,840 AJE 8
110 Prepaid Insurance D-1 35,336 38,636
111 Prepaid Rent D-3 5,000 1,250
112 Office Supplies Inventory D-3 8,657 9,964
113 Small Tools Inventory D-3 7,162 6,541
115 Investment in Securities E-1 474,518 223,033 37,600 AJE 9
116 Allow. For Unreal. Gain/Loss E-1 6,473 6,473
201 Long-term Investments E-6 220 AJE 11
210 Land F-1 82,250 82,250
220 Buildings F-1 276,263 276,263
221 Accum. Depre. - Buildings F-1 - 65,416 - 74,625
230 Machinery and Equipment F-1 540,845 1,006,045
231 Accum. Depre. - M&E F-1 - 160,866 - 189,848 210 AJE 13
240 Automotive Equipment F-1 99,425 99,425
241 Accum. Depre. -Auto. Equip. F-1 - 52,798 - 77,654
250 Office Furnitures & Fixtures F-1 106,433 114,833
251 Accum. Depre. -Off. Furn. & Fixt. F-1 - 37,581 - 43,113
260 Leased Equipment F-6 74,800 AJE 12
261 Accum. Depre. - Leased Equip F-6
Total assets 2,847,037 3,275,915
Liabilities:
301 Account Payable G-1 223,161 135,550
302 Accrued Payroll Taxes H-1 113,846 86,253
303 Wages and Salaries Payable H-2 81,239
304 Accrued Property Taxes H-3 14,113 21,988
305 Accrued Interest I-1 10,625 15,833
306 Dividends Payable H-3 17,575 23,125
307 Federal Income Tax Payable H-4 63,772 25,000 23,859 AJE 18
308 Note Payable - Short Term I-1 125,000
350 Lease Obligation - Short Term F-6
401 Note Payable - Long Term I-1 475,000
450 Lease Obligation - Long Term F-6
Total liabilities 649,331 782,749
Owners' Equity
501 Common Stock J-1 925,000 925,000
 505 Other Contributed Capital J-1 736,550 736,550
506 Unreal. Gain/Loss Investments E-1 6,473 6,473 11,983 AJE 10
601 Retained Earnings K-1 272,435 529,683
605 Dividends K-1, H-3 - 17,575 - 23,125
610 Current Net Income TB-IS 274,823 318,585 175,915
Total Owners' Equity 2,197,706 2,493,166
Total Liabilities and Owners' Equity 2,847,037 3,275,915
 Blossom Cologne Company
g Trial Balance-Balance Sheet
12-31-03
Per Reclasification Financial
Adjustments Audit Items Statement
Credit 12-31-03 Debit Credit 12-31-03

846,541 10,000 RJE 1 836,541

36,968 36,968
204 AJE 5 296 296
3,578 AJE 1, 2, 3 209,127 209,127
- 5,589 - 5,589
3,750 3,750
9,936 AJE 6, 7 743,551 743,551
38,636 38,636
1,250 1,250
9,964 9,964
6,541 6,541
260,633 72,173 RJE 2 188,460
11,983 AJE 10 - 5,510 - 5,510
220 72,173 RJE 2 72,393
82,250 82,250
276,263 276,263
- 74,625 - 74,625
1,006,045 6,250 RJE 3 1,012,295
- 189,638 1,980 RJE 4 156 RJE 3 - 187,814
99,425 99,425
- 77,654 - 77,654
114,833 114,833
- 43,113 - 43,113
74,800 74,800
3,740 AJE 12 - 3,740 - 3,740
3,411,224 3,409,298

88,250 AJE 8, 9, 14, 15, 16 223,800 223,800

42,994 AJE 17 129,247 129,247
95,289 AJE 17 95,289 95,289
21,988 21,988
4,114 AJE 12 19,947 19,947
23,125 23,125
1,141 1,141
- -
12,701 AJE 12 12,701 12,701
475,000 475,000
62,099 AJE 12 62,099 62,099
1,064,337 1,064,337
-
925,000 925,000
 736,550 736,550
- 5,510 - 5,510
529,683 529,683
- 23,125 - 23,125
41,619 184,289 10,156 8,230 182,363
2,346,887 2,344,961
3,411,224 3,409,298
 Apple Blossom Cologne Company
Working Trial Balance-Income Statement
12-31-03
Working Per Per
Paper Audit Books Adjustments
Reference 12-31-02 12-31-03 Debit Credit
Revenue
701 Sales 3,906,577 4,272,623 2,828 AJE 1, 2
703 Sales Return and Allowance - 29,820 - 33,051
Net Sales 3,876,757 4,239,572
Expenses
801 Cost of Goods Sold 1,596,800 1,742,503 15,480 AJE 14
Gross Margin 2,279,957 2,497,069
Operating Expenses
820 Wage and Salary Expense H-1 1,528,700 1,618,643 123,192 AJE 17
821 Payroll Tax Expense H-1 129,959 128,033 15,091 AJE 17
822 Depreciation Expense F-1 64,422 80,459 3,740 AJE 12 210
823 Rent Expense D-3 3,750 3,750
824 Office Supplies Expense D-3 9,683 12,380
825 Small Tools Expense D-3 3,359 6,419
826 Advertising Expense 12,714 44,934
827 Insurance D-1 28,930 32,765
828 Repairs and Maintenance F-5 17,869 14,240
829 Property Tax H-3 14,113 21,988
830 Utilities Expense 11,742 14,760 1,100 AJE 15
831 Professional Fees 13,347 37,140
832 Miscellaneous Expense 494 825 10,370 AJE 5, 6, 7, 16
833 Provision for Bad Debt B-6 11,156 22,790 13,580
834 Freight Expense 31,641 46,310
Total Operating Expenses 1,881,879 2,085,436
Net Income from Operations 398,078 411,633
Other Income (Expense)
901 Interest Expense - 27,500 - 21,146 4,114 AJE 12
910 Gain (Loss) Sale of Investments 25,975
920 Income from Investments 9,379 7,393 3,970
930 Gain (Loss) Sale of Fixed Assets 18,638 - 15,270
950 Miscellaneous Income 10,000
Net Other Income 517 6,952
Net Income before Taxes 398,595 418,585
940 Federal Income Tax 123,772 100,000 23,859
Net Income 274,823 318,585
ne Company
ome Statement

Per Reclasification Financial

ments Audit Items Statement
12-31-03 Debit Credit 12-31-03

4,269,795 4,269,795
- 33,051 - 33,051
4,236,744 4,236,744

1,757,983 1,757,983
2,478,761 2,478,761

1,741,835 1,741,835
143,124 143,124
AJE 13 83,989 156 RJE 3 1,980 RJE 4 82,165
3,750 3,750
12,380 12,380
6,419 6,419
44,934 44,934
32,765 32,765
14,240 6,250 RJE 3 7,990
21,988 21,988
15,860 15,860
37,140 37,140
11,195 11,195
AJE 4 9,210 9,210
46,310 46,310
2,225,139 2,217,065
253,622 261,696

- 25,260 - 25,260
25,975 25,975
AJE 11 11,363 11,363
- 15,270 - 15,270
10,000 10,000 RJE 1 -
6,808 - 3,192
260,430 258,504
AJE 18 76,141 76,141
184,289 182,363
 Apple Blossom Cologne Company AJE
Proposed Adjusting Journal Entry 1-31-04
12-31-03 FK
Account
Account Description Number Debit Credit
AJE 1 (AR)
Sales 701 1,748
Account Receivable 105 1,748
AJE 2 (AR)
Sales 701 1,080
Account Receivable 105 1,080
AJE 3 (AR)
Allowance for bad debt 106
Account Receivable 105 750
AJE 4 (AR)
Allowance for bad debt 106 13,580
Provision for bad debt 833 13,580
AJE 5 (Cash)
Miscellaneous Expense 832 204
Petty cash 103 204
AJE 6 (Inventory)
Miscellaneous Expense 832 1,008
Inventory 109 1,008
AJE 7 (Inventory)
Miscellaneous Expense 832 8,928
Inventory 109 8,928
AJE 8 (Inventory)
Inventory 109 33,840
Account payable 301 33,840
AJE 9 (Investment)
Investment in securities 115 37,600
Account payable 301 37,600
AJE 10 (Investment)
Unreal. Gain/Loss Investments 506 11,983
Allow. For Unreal. Gain/Loss 116 11,983
AJE 11 (Investment)
Miscellaneous Receivable 107 3,750
Long-term investment 201 220
Income from investment 920 3,970
AJE 12 (PPE)
Leased Equipment 260 74,800
Lease Obligation - Short 350 12,701
Lease Obligation - Long 450 62,099
Interest expense 901 4,114
Accrued interest 305 4,114
Depreciation exp 822 3,740
Accum Depr - Leased Equip 261 3,740
AJE 13 (PPE)
Accum Depr - Mach & Equip 231 210
Depreciation exp 822 210
AJE 14 (AP)
Cost of Goods Sold 801 15,480
Account payable 301 15,480
AJE 15 (AP)
Utilities expense 830 1,100
Account payable 301 1,100
AJE 16 (AP)
Miscellaneous expense 832 230
Account payable 301 230
AJE 17 (Payroll)
Wage & salary expenses 820 123,192
Payroll tax expenses 821 15,091
Wages & salaries payable 302 42,994
Accrued payroll tax 302 42,994
AJE 18 (Completing)
Federal income taxes expense 940 23,859
Federal income tax payable 307 23,859
 Apple Blossom Cologne Company RJE
Proposed Reclasification Journal Entry 1-31-04
12-31-03 FK
Account
Account Description Number Debit Credit
RJE 1 (Cash)
Miscellaneous income 950 10,000
Cash - Big City National Bank 101 10,000
RJE 2 (Investment)
Long-term investment 201 72,173
Investment in securities 115 72,173
RJE 3 (PPE)
Machine & Equipment 230 6,250
Repair & maintenance expense 828 6,250
Depreciation exp 822 156
Accum Depr - Mach & Equip 231 156
RJE 4 (PPE)
Accum Depr - Mach & Equip 231 1,980
Depreciation exp 822 1,980
 APPLE BLOSSOM COLOGNE COMPANY
Balance Sheet
December 31, 2002 and 2003
ASSETS LIABILITIES AND STOC
Current Assets: 2003 2002 Current Liabilities:
Cash 873,805 519,955 Account payable
Account receivable less allowance for losses Accrued liabilities
$5.589 (2003) ; $11.889 (2002) 203,538 127,615 Notes Payable
Miscellaneous receivables 3,750 Dividends payable
Inventories 743,551 873,766 Income taxes payable
Prepaid expenses 56,391 56,155 Current portion of lease obligation
Investment in securities 182,950 480,991 Total Current Liabilities:
Total Current Assets: 2,063,985 2,058,482 Long-term debt due after one year
Long-term investment 72,393 Long-term lease obligation
Property, plant, & equipment, at cost Total Liabilities
Land 82,250 82,250
Buildings 276,263 276,263 Stockholder's Equity:
Machinery and equipment 1,012,295 540,845 Common stock, par value $100, author
Automotive equipment 99,425 99,425 shares, issued and outstanding 9.250 s
Office furniture and fixturres 114,833 106,433 Contributed capital in excess of par val
Leased Equipment 74,800 - Unrealized gain (loss) on investment
1,659,866 1,105,216 Retained earnings
Less accumulated depreciation - 386,946 - 316,661 Total Stockholder's Equity
1,345,313 788,555 TOTAL LIABILITIES AND STOCKHOLDER'S EQ
TOTAL ASSETS 3,409,298 2,847,037
 LIABILITIES AND STOCKHOLDER'S EQUITY
2003 2002
223,800 223,161
266,471 219,823
- 125,000
23,125 17,575
axes payable 1,141 63,772
ortion of lease obligation 12,701
527,238 649,331
m debt due after one year 475,000
m lease obligation 62,099
1,064,337 649,331

stock, par value $100, authorized 20.000

sued and outstanding 9.250 shares 925,000 925,000
ed capital in excess of par value 736,550 736,550
d gain (loss) on investment - 5,510 6,473
688,921 529,683
lder's Equity 2,344,961 2,197,706
TIES AND STOCKHOLDER'S EQUITY 3,409,298 2,847,037
 Apple Blossom Cologne Company
Statement of Income
Year Ended December 31, 2003 and 2002
2003 2002
Net sales and other revenues 4,236,744 3,876,757
Cost of goods sold 1,757,983 1,596,800
Gross margin 2,478,761 2,279,957
Operating expenses:
Selling, general, and administrative 2,134,900 1,817,457
Depreciation 82,165 64,422
2,217,065 1,881,879
Operating Income 261,696 398,078
Other income (expense) and adjustment:
Interest - 25,260 - 27,500
Other income 11,363 9,379
Gain on sale of fixed assets - 15,270 18,638
Gain on sale of investments 25,975
Net income before federal income taxes 258,504 398,595
Provision for income taxes - 76,141 - 123,772
NET INCOME 182,363 274,823
Earnings per common share 19.71 29.72
 APPLE BLOSSOM COLOGNE COMPANY
Statement of Change in Stockholder's Equity
Years Ended December 31, 2003 and December 31, 2002
2003 2002
Common stock:
Common stock at beginning year 925,000 925,000
Common stock at end of year 925,000 925,000

Contributed capital:
Contributed capital at beginning of year 736,550 736,550
Contributed capital at end of year 736,550 736,550

Unrealized Gain (Loss) on Investment:

Unrealized Gain (Loss) at beginning of year 6,473 4,496
Change in unrealized gain (Loss) - 11,983 1,977
Unrealized Gain (Loss) at end of year - 5,510 6,473

Retained Earnings:
Retained earnings at beginning of year 529,683 272,435
Net income for the year 182,363 274,823
Dividends - 23,125 - 17,575
Retained earnings at the end of year 688,921 529,683
APPLE BLOSSOM COLOGNE COMPANY
Statement of Cash Flows
Years Ended December 31, 2003 and December 31, 2002
2003 2002
Cash flow from operating activities:
Net income 182,363 274,823
Add (Deduct) items not using (providing) cash:
Depreciation 82,165 64,422
Change in account receivable - 69,623 4,509
Change in allowance for bad debts - 6,300 - 1,880
Change in misscellaneous receivables - 3,750
Change in inventory 130,215 - 285,627
Change in prepaid expense - 236 4,049
Securities purchased on account - 37,600
Change in account payable 639 82,512
Change in accrued liabilities 46,648 28,210
Change in income taxes payable - 62,631 49,542
Gain or loss sale of assets 15,270 - 18,638
Gain or loss sale of investment - 25,975
Amortization of bond discount - 220
Net cash provided operating activities 250,965 201,922
Cash flows from investing activities:
Cash provided
Sale of assets 12,450 39,638
Sale of securities 372,243
Cash disbursement
Purchase of assets 519,450 54,016
Purchase of securities 94,783 147,320
Net cash provided (used) investing activities - 229,540 - 161,698
Cash flows from financing activities:
Cash provided
Issuance of notes payable 475,000 245,000
Cash disbursement
Dividends paid 17,575 13,875
Payment on notes 125,000 120,000
Net cash provided (used) financing activities 332,425 111,125
Net increase (decrease) in cash 353,850 151,349
Cash at beginning of year 519,955 368,606
Cash at end of year 873,805 519,955

2,003 2,002
Supplement Disclosures of Cash Flow Information
Interest paid 15,833 16,875
Interest taxes paid 138,772 74,230
Supplement Schedule of Noncash Transactions
Equipment purchased on capital lease 74,800
Securities purchased on account 37,600