Reference no: EM133378725
Question: Ron Abrams has come into your office for his weekly 1 on 1 in which you update him on your weekly progress on your projects. He has arrived with a stack of paperwork in his hands and a befuddled look on his face. You ask what's going on and he responds as follows. "Last year, as you know, we purchased a bankrupt, closed down bottling facility in The Ukraine. I don't know if you know this but in countries other than Canada they are using somewhat different accounting policies than we do, and the reports I have for the first few months of operations for that location look nothing like anything I have seen before. I'm aware that the company made no money this month as it's had no sales or operations, but I cannot understand our capital position. I'm leaving you with a new project. I know you've been learning accounting so I want you to take the opening information for the business from the date of purchase and come up with the balance sheet as it should appear to me as a Canadian Reader." You are somewhat puzzled with this new challenge, yet flattered at the same time, and agree to take it on.
Given:
The newly purchased firm was bought on November 1. At inception the balance sheet accounts of the firm were as follows:
| Account Name |
$ |
|
Account Name |
$ |
| Accounts Payable |
85,000 |
|
Bonds Payable (Over 1 Year) |
45,000 |
| Accounts Receivable |
67,000 |
|
Share Capital |
936,200 |
| Land |
490,000 |
|
Furniture and Fixtures |
15,000 |
| Building |
320,000 |
|
Wages Payable |
55,000 |
| Equipment |
175,000 |
|
Bottle Processing Patent Fee's Payable |
25,000 |
| Cash |
2,200 |
|
Taxes Payable |
58,000 |
| Notes Payable |
60,000 |
|
Bottle Inventory |
195,000 |
During the month of November the following transactions occurred:
Accounts Receivable for $16,000 was collected.
Wages due of $15,000 were paid out in cash.
$175,000 in Equipment was purchased on credit ($100 was due on delivery and was paid in cash).
Their land was appraised and found to be worth $560,000.
A stakeholder, Bruce Wayne, provided the company with equipment and in return received $65,000 in shares.
$300,000 in shares was retired for bonds payable on December 15, 2025.
Bottle Processing Patent Fees were paid completely out on Credit.
$175,000 in Old Bottles was returned to the former supplier for their cash value.
A bank loan for $65,000 was taken out. The amount was kept in cash over the end of the month.
Required:
Create a Balance Sheet for November 30th assuming no other transactions occurred for the month other than those noted above.
1-Conversion to Canadian Balance Sheet and T-Accounts
2- Final Balance Sheet