Critical Thinking Problem $13\mathrm{.}2($Static$)$ Classified Balance Sheet LO $13-3$

Brandon Mandava Is the owner of Royal Jewels, a store speclalizing in gold, platinum, and special stones. During the past year, in

response to Increased demand, Brandon doubled his selling space by expanding into the vacant bullding space next door to his store.

This expansion has been expensive because of the need to increase inventory and to purchase new store fixtures and equipment,

Including carpeting and state$-$of$-$the$-$art built$-$In fixtures. Brandon notes that the company's cash position has decreased and he is

worrled about future demands on cash to finance the growth.

Brandon presents you with a statement showing the assets, llabilitles, and his equlty for year$-$end $200$ and $201$ and asks your

opinion on the company's ability to pay for the recent expansion. He did not have income and expense data avallable at the time. He

commented that he had not made any new investment in the business in the past two years and was not financlally able to do so

presently. The information presented is shown below: