Introduced Josephine Deau and her water park company, Slip and Slide Ltd. At the end of July,

Question:

Introduced Josephine D’eau and her water park company, Slip and Slide Ltd. At the end of July, the following items were in her records:
Cash in bank accounts ................................................................................ $15,000
Chemical supplies on hand ......................................................................... 12,620
Loan owed to an investor ............................................................................ 22,500
Retained earnings.......................................................................................... 20,120
Spare parts ..................................................................................................... 15,000
Common shares ............................................................................................. 30,000
Amounts prepaid by customers to access the park in August ................. 35,000
Cost of kayaks and pedal boats .................................................................... 65,000

Required

a. Identify each of the items in her records as an asset, liability, or shareholders’ equity item.

b. Prepare a statement of fi nancial position for Slip and Slide Ltd. at the end of July.

c. Does Josephine D’eau have any inventory? Explain.

d. Josephine D’eau does not have accounts receivable in her records. Explain why it is unlikely that she will record accounts receivable. Under what business circumstances would she need to record accounts receivable?

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...

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