Question

Q2. (25 marks) The following statement of financial position was prepared by the bookkeeper for Badger Corp. at December 31, 2020. Badger Corp Statement of Financial Position December 31, 2020 Cash$ 90,000 Accounts payable$ 75,000 Accounts receivable (net)52,200 Long-term liabilities110,000 Inventories57,000Shareholders' equity208,500 Investments76,300 Equipment (net)86,000 Patents 32,000 $393,500$393,500 The following additional information is provided: nella hank overdraft of $1,500 has been deducted.

Answer 1

B D E F Amount Amount Liabilities & capital Amount Long term liabilities 110000 124000 -40000 Current liabilities 32000 Accounts payable 75000 43300 Bank Overdraft 1500 9000 168300 Shareholder's equity 213500 G Н. 1 j K L M N 1. Cash- 90000-9400+1500=82100 2. When inventory increase by 5000, profit also increases by the same amount 3. Equipment is recorded on net basis Net book value+Accumulated depreciation= Historical cost 86000+40000+6000= $132000 Out of This, 8000 is held for sale The remaining, Historical cost=$124000, acc dep=40000 1 BALANCE SHEET 2 Assets 3 Non Current Assets 4 Equipment 5 Less: accumulated dep 6 Patents 7 Long term investment 3 Franchisee 9 Total non current Assets LO Current Assets 11 Equipment held for sale 12 Investments-Trading 13 Inventory 57000 14 (+) goods sent on consignment 5000 15 Accounts receivable 57000 16 (-) allowance for doubtful debts - 4800 17 Prepaid insurance 18 Cash 9 Total current assets 20 21 Total 2000 24000 62000 52200 9400 82100 231700 400000 400000 22 23