Reference no: EM132847325
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 - Generate a Balance Sheet for November 30th assuming no other transactions occurred for the month other than those noted above.