Papadopoulos Limited (PL) sells retail merchandise in Canada. The company was incorporated last year and is now
Question:
The books have been kept by Iris's daughter Tonya, who is studying accounting in university. Financial statements had only been prepared for tax purposes in the past. For the year ended December 31, 2017, Tonya pre- pared the following statement showing cash inflows and cash outflows:
Tonya showed the statement to her mother, noting that the bank was sure to give them a loan, especially since they were profitable in their second year and since cash had increased over the year, which shows that it had been a good year. Iris was not convinced, however, and decided to have the statement looked at by a "real" accountant.
Instructions
Adopt the role of the accountant and, if necessary, redraft the statement for the bank with proper classifications. Discuss the company's financial position and conclude with the likely response from the bank. Consider ASPE to be a constraint.
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Step by Step Answer:
Intermediate Accounting
ISBN: 978-1119048541
11th Canadian edition Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy