Question

El.14 (LO 5) Bear Park Ltd., a camping ground in the Lake District, has compiled the following financial information as of December 31, 2020. £ 60,000 Notes payable Expenses during 2020 Supplies on hand Share capital-ordinary Retained earnings Revenues during 2020-camping fees Revenues during 2020-general store Accounts payable Cash on hand £140,000 150,000 47,000 11,000 2,500 20,000 20,000 Original cost of equipment Fair value of equipment 105,500 140,000 Instructions a. Determine Bear Park's net income for 2020 b. Prepare a statement of financial position for Bear Park Ltd. as of December 31, 2020

Answer 1

a. Net Income = Revenue less expenses

Bear Park's Revenue = Revenue from Camping fees + Revenue from General store

= EUR140,000+EUR47,000

= EUR 187,000

Bear Park's Expense = EUR 150,000

Thus, Bear Park's Net Income = EUR 187,000 less EUR 150,000

= EUR 37,000

b. Statement of Financial position:

Balance Sheet of Bear Park Ltd
As of December 31, 2020
Assets	Amount (EUR)	Liabilities & Equity	Amount (EUR)
Current Assets		Current Liabilities
Cash on Hand	20,000	Accounts Payable	11,000
Supplies on hand	2,500
Investments		Long Term Liabilities
		Notes Payable (assumed to be long term (i.e. Payable more than 12 months); if it is due less than 12 months, please consider under "current liabilities")	60,000
Fixed Assets		Total Liabilities
Equipment	105,500	Equity:
		Stockholders Equity	20,000
Intangible & Other Assets		Retained Earnings (Net Income based on above calculation as per point a. above)	37,000
Total Assets	128,000	Total Liabilities & Equity	128,000