Scallops Galore Ltd is a seafood eatery specialising in shellfish and soups. The premises are rented and all sales are for cash, so the company has only a few balance sheet accounts. The accounts, as at 30 June 2016, are as follows.

Required:
1. Prepare a balance sheet for Scallops Galore Ltd as at 30 June 2016. Include any notes to the balance sheet that you think might be useful.
2. Comment on the company's financial position as shown by your balance sheet.
3. Suppose, when you were reviewing the company's accounts after preparing the balance sheet, you found an error in the records. The company had paid a supplier $2900, but that payment had inadvertently not been deducted from the company's bank account record or from its record of accounts payable to suppliers. You decided to record that payment. What changes resulted in the balance sheet you prepared in question 1 and in your comments in question 2?

Transcribed Image Text:

Food supplies cost Equipment cost Other supplies cost Cash at bank Payable to suppliers Long-term loan Wages payable Share capital Accumulated depreciation Retained profits 2100 64900 4500 2200 5.300 25000 900 10000 27 400 5100