Purchase Point Media Corporation. Business & Marketing Coursework

Purchase Point Media Corp
Step 1 – Form and Substance Errors
Summary of substance Errors
1. Location:
In Exhibit 2, Note 20 on Stationery and Printing is written as “Stationery and Printing Office stationery will be purchased during the first quarter in sufficient quantities to last the entire year. Said cost is estimated at $10,000.”
Error
Figure covers the whole year.
Correction:
It should have been written “The stationery and printing office stationery costs are estimated as $ 10,000 for the entire year.”
2. Location:
Note 6, exhibit 2 the total for the marketing sales and commissions in second quarter was noted down as $ 4,777,000
Error:
This is summation error, as the totals do not add up to $ 4,777,000
Correction:
It should have been written as written as $ 4,770,000.
3. Location:
In Exhibit 2, note 6, the third quarter commission states “$5,382,000.”
Error:
A transposition error of the 3rd quarter in the 15% commissions’ column has a total amount of $5,382,000.
Correction:
It should have been written as “$5,832,000.” instead of $5,382,000.
4. Location:
Exhibit 2, Note 6 the totals for 15% commissions segment was $ 18,594,000
Error:
Summation error
Correction:
It should have been written as “$18,504,000”, instead of “$18,594,000”
5. Location:
The sixth page Exhibit 2 states “The chances of this ever happening is extremely remote. Insurance coverage is estimated $25,000 per quarter.”
Error:
$25,000 per quarter(three months) and no monthly
Correction:
It should be written as “Insurance coverage is estimated $25,000 $25,000 per quarter”, but is $ 8,333 per month and $ 100,000 per year.”
6. Location:
The sixth page Exhibit 2, None 15 on Management Fess the annual remuneration figure for the vice President is $ 9,000
Error:
$25,000 per quarter(three months) and no monthly
Correction:
It should be written as $ 90,000 so the total annual remuneration is $290,0000
7. Location:
Note 8 of exhibit two, the second sentence states “Salary compensation for this clerk will be $2,000 per month in the last quarter. Therefore, the first three-quarters will bear a cost of $18,000 and the last quarter will have a cost of $24,000.”
Error:
The figure is inaccurate as the clerk will only work for 3 months (one quarter)
Correction: It should be written “the last quarter will have a cost of $6,000 ($2,000*3)
10. Location:
Note 19 states “Personnel Monthly Salary Employee Benefits Total Quarterly is $ 72,000.”
Error:
The figure is only for the quarterly periods and may be confusing
Correction:
It should be written as “: Personnel Monthly Salary Employee benefits are $ 24,000 per month.”
11. Location:
Note 4 states “Assuming an even distribution by quarter over the year, each quarter would result in 36,000 panels being replaced at a cost of $223,920 and the printing of inserts will add an addition cost of $3,960 for a total replacement cost of $227,880.
Error:
There is no clarification on whether the replacement cost is quarterly or totaled for the entire period quarterly periods.
Correction:
It should be written as “Assuming an even distribution by quarter over the year, each quarter would result in 36,000 panels being replaced at a cost of $223,920 and the printing of inserts will add an addition cost of $3,960 for a total replacement cost of $227,880 for each quarter.
Summary of Errors in the Form
1. Location: The title Exhibit 1, states that the financial statement is “For the first twelve months of operations.
Error:
The financial record is the 12 months it should be financial year
Correction:
It should be written as “For the first year of operation”
2. Location:
The first page of Exhibit 1, the third sentence of the first paragraph states “Both the Corporate house and Purchase Point Media Corp., assumes no obligation to update these forward looking statements to effect actual changes”
Error:
The word assumes is singular. It should be plural.
Correction:
It should have been written “ Both the Corporate house and Purchase Point Media Corp., assume no obligation to update these forward looking statements to effect actual changes”
3. Location:Exhibit one, first sentence states“Safe harbor statement under the private securities litigation act”.
Error: Capitalization
Correction: “Projected Statement of Net Income For the first twelve months of operations Safe harbor statement under the private securities Litigation Act”
4. Location:Exhibit 1, in the third paragraph states “PPMC’s “Projected Statement of Net Income”
Error:
There is no statement known as projected Statement of Net Income
Correction:
It should be written as “Projected Net Income Statement”
5. Location:
Exhibit 1, fourth sentence states “Changes in assumptions or changes in other factors effecting such statements.”
Error:
Grammatical error “in other factors effecting” such statements
Correction:
It should be written as “Changes in assumptions or changes in other factors affecting such statements.”
6. Location:
The salutation in Exhibit 1 “Dear Sirs”
Error:
Singular/ plural error
Correction:
It should have been written as “Dear Sir”
7. Location:
Exhibit 1, second paragraph states “We have made basic assumptions in compiling the information”
Error:
There is no information on these assumptions
Correction:
Thereshould have been disclosure or notes on these assumptions
8. Location:
In Exhibit I paragraph 2, states, “revenue will commence to be generated once the Company’s patented displays have been installed”.
Error:
The cash and accrual basis of recording revenue
Correction:
Revenue recognition occurs when the cash is received.
9. Location:
The fourth sentence of Exhibit 1, states “Changes in assumptions or changes in other factors effecting such statements”.
Error:
The sentence fragment is incomplete
Correction:
It should be written as “There are changes in assumptions or changes in other factors affecting such statements”.
10. Location:
Exhibit 1 letter, last sentence of the introduction paragraph states “These figures do not include start up and development costs”.
Error:
Lack of disclosure and elaboration on the figures that would make up the start up and development costs
Correction:
It should be written as “The start up and development costs should have been included in these figures.”
11. Location:
Exhibit 1, second paragraph states “a total of 1,200 stores subsequent to the first month will be added to the Company’s list of clients each month thereafter for a total of 14,400 stores in year one.”
Error:
Subsequent is used instead of after
Correction:
It should be written as “a total of 1,200 stores after the first month will be added to the Company’s list of clients each month thereafter for a total of 14,400 stores in year one.”
12. Location:
The letter close, in Exhibit 1 statement states “Yours very truly; Corporate House”
Error: The ending is inappropriate
Correction:It should be written as “Yours” or “Yours truly”
13. Location:
Letter close in Exhibit 1 statement states “Yours very truly; Corporate House”
Error:
The signatory is the person signing the letter
Correction:
It should be written as “Yours very truly”, followed by the signature, then name and title.
14. Location:
Note 4 on Due to Vandalism item states of the Exhibit 2 states “It is estimated vandalism will effect 5% of the display panels.”
Error:
Effect is used instead of affect
Correction:
It should be written as “It is estimated vandalism will affect 5% of the display panels.”
15. Location:
Note 4 on Due to Vandalism item states of the Exhibit 2 states “Management is currently seeking insurance, which will lessen this expense”
Error:
Lessen expense is incorrect
Correction:
It should be written as “Management is currently seeking insurance, which will reduce or lower this expense.”
16. Location:
Note 4 of the Exhibit 2 states “van...