You have been retained by Downunder Company to straighten out its accounting records. The company’s trusted accountant for the past 25 years suddenly retired to a tropical island in the South Pacific and, in his rush to get away, he seems to have misplaced the company’s accounting records. Now the bank has asked for the latest financial statements, so it can determine whether to renew the company’s loan. Luckily, you managed to find the following listing of accounts and their balances, in alphabetical order, written on the back of one of the accountant’s travel brochures.

Required

a. Based on the information available, prepare a statement of income for the year 2020 and a statement of financial position as at December 31, 2020. Note that there is no amount available for Retained Earnings, so you will have to enter whatever amount is required to make the statement of financial position balance.

b. Identify several additional pieces of information that would be needed for preparing more complete and accurate financial statements.

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Accumulated Depreciation, Equipment Common Shares Accounts Receivable Accounts Payable Cash (in bank account and in cash box) Cost of Goods Sold Equipment (original cost) Interest Expense Bank Loan Payable Miscellaneous Expenses Sales to Customers Wages Expense Wages Payable $ 4,000 20,000 20,200 13,000 1,100 41,000 7,900 2,000 51,500 500 15,000 8,000 93,600 27,500 1,200 Inventory Depreciation Expense