60.1K

Verified Solution

Link Copied!

The bookkeeper for Grace Inc. prepared the following balance sheet at Dec $31,2023.$

$\backslash$table$[[,,],[$Cash$,451,500,$Current liabilities$],[$Accounts Receivable $($net$),644,000,$Long$-$term liabilities$],[$Inventories $($cost$),172,200,$Shareholder's Equity$],[$Investments$,232,400,],[$Land$,220,000,],[$Building $($net$),1,176,000,],[$Equipment $($net$),647,500,],[$Tradename $($net$),98,{000}_{?},],[,3,641,600,],[,,]]$

The following additional information is provided

The cash balance includes:

Petty cash

T$-$bill

Cash advance to employee, payable on demand

Savings account CIBC

Chequing account CIBC

Bank overdraft at TD bank

Short term paper maturity $2$ months

$2.$ Allowance for doubtful account is

$3$ The net realizable value of inventory that is included in the balance sheet is $$140,000$

Inventories do not include $$210,000$ of merchandise that was in transit at December $31.$

Of this amount, $$140,000$ was bought from George Inc. with terms f$.$o$.$b$.$ shipping point $($the net realizable value of this inventory was $$245,000)$

The remainder of inventory that cost $$70,000$ was shipped from Grace Inc. for consignment. The net realizable value for tl inventory is $$168,000.$

$4.$ The investments section includes the following:

An interest bearing note receivable of $$8,000$ that was issued on June $1$ st$,2023$ bearing interest at $6\%$ and is due on June $2024$

Long$-$term FV$-$OCI investment $$12,200$ carrying value $($fair value $$9,000$ at December $31,2023).$ Management plans on holding on to these investments for a number of years.

FV$-$NI Investment $1,000$ common shares of Landon Inc. purchased at $$91\mathrm{.}00$ per share $($fair value $$108\mathrm{.}50$ per share at December $31,2023).$ Grace expected to sell the shares as soon as the market price increases more next year.

$5.$ The land balance includes: land used for operations and recorded at its cost of $$120,000($the appraisal value of the land in $2023$ was $$2,800,000).$ Land held for future use cost of $$100,000($appraisal value of land $$1,750,000).$ The company doesn't use the revaluation model.

$6.$ The building originally cost $$5,600,000.$ The equipment originally cost $$1,400,000.$ Depreciation for $2023$ has already been recorded.

Scotiabank has pledged the building as security for their $$100,000$ loan to Grace Corp. $($collateral$),$ the loan bears annual interests at $8\%.$

$7$ The tradename originally cost $$168,000$ and is being amortized over $6$ years on a straight$-$line basis. Amortization for $2023$ had already been recorded.

$8.$ Included in the current liabilities is: Accounts payable $$73,500,$ Wages payable $$238,000,$ Deferred Revenue $$168,000$ and Pension obligation $$570,500$

$9.$ Included in the long$-$term liabilites is: Bank loan is due each year$),$ Notes Payable $$700,0007\%$ due November $30$th $2024.$

$10.$ Included in the shareholder's equity is: Common shares $$1,050,00010,000$ issued and outstanding, Retained earnings $?$ an Accumulated Other Comprehensive Income $$107,800.$

Required:

Part $1(20$ marks$)$

The company is a Canadian public company. Restate the Statement of

Financial Position sheet at December $31,2023$ in good form. The categories are: Current Assets,

Long$-$term Investments and Long$-$term Receivables, Property, Plant & Equipment and Intangible Assets.

Current liabilities, Long$-$term liabilities and Shareholder's Equity

Part $2(6$ marks$)$

Include any disclosure requirements.

Part $3(10$ marks$)$

If you changed any of the values to the assets or liabilities prepare any adjusting or correcting entries to reflect the

Channges you made.

Please reply asap, this is the second time I am asking this question as it has already been $24$ hrs since i asked for the first time.

Thank you

Answer & Explanation Solved by verified expert

See Answer