Comparative Statement of Financial Position

$20212020$

Assets:

$ $

Noncurrent Assets:

Land $18,00040,000$

Equipment $70,00060,000$

Accumulated depreciation $(20,000)(13,000)$

Total non$-$current assets $68,00087,000$

Current Assets:

Prepaid insurance $25,00017,000$

Trade receivable $($net$)70,00060,000$

Cash $36,00031,000$

Total current Assets $131,000108,000$

Total Assets $199,000195,000$

Shareholder$$s Equity:

Share Capital $$ ordinary shares $140,000115,000$

Retained earnings $21,00055,000$

Total Shareholder$$s Equity $161,000170,000$

Liabilities:

Non$-$current liabilities:

Bonds payable $27,00019,000$

current liabilities:

Accounts payable $11,0006,000$

Total liabilities $38,00025,000$

Total shareholders' equity & liabilities $199,000195,000$

Additional information:

$1.$ Net loss for $2021$ is $$20,000.$

$2.$ Cash dividends of $$14,000$ were declared and paid in $2021.$

$3.$ Land was sold for cash at a loss of $$4,000.$ This was the only land transaction during the year.

$4.$ Equipment with a cost of $$15,000$ and accumulated depreciation of $$10,000$ was sold for $$5,000$ cash.

$5.$ $$22,000$ of bonds were retired during the year at carrying $($book$)$ value.

$6.$ Equipment was acquired for ordinary shares. The fair value of the shares at the time of the exchange was $$25,000.$

Instructions

$($A$)-$Prepare the statement of cash flows for the year ended $2021,$ using the indirect method.

$($B$)-$ Calculate and interpret two long term solvencies: debt & gearing ratios.

The end of net cash $2020=31000$