A friend of yours is the president of Maple Imports Ltd. The company sells and services cars imported from Korea. Maple has just completed its first year of operations. The following balance sheet was prepared by the company bookkeeper:

Maple Imports Ltd.
 Balance Sheet
 As at December 31, 2015

Assets                                                                                                                            
 Cash in current account ......................................................................................  $4,000
 Accounts receivable (note 1) ...............................................................................  90,000
 Cars and car parts (note 2) ................................................................................. 815,000
 Accumulated depreciation on cars (note 3) ........................................................ (87,500)
 Equipment (note 4) ............................................................................................. 170,000
 Land held for future development ....................................................................... 228,000
                                                                                                                          $1,219,500
 Equities                                                                                                                            
 Accounts payable (note 5) ...............................................................................  $419,000
 Bank loan payable (note 6) ...............................................................................   320,000
 Common shares (40,000 shares authorized and issued) .................................   400,000
 Net income ........................................................................................................    80,500
                                                                                                                          $1,219,500

Notes: 

1. Accounts receivable is composed of the following:                                                              

Debit balances in customer accounts ......................................................     $145,000
Credit balances in customer accounts .....................................................      (55,000)
                                                                                                                         $90,000

2. The cars and car parts account is composed of the following:                                             

Car parts for service department (at cost) .................................................     $65,000
Cars intended for resale (at retail price) ....................................................     645,000
Cars used by executives for business purposes .......................................     105,000
                                                                                                                      $815,000

The purchase price of the cars intended for resale was $530,000. The cars for the executives were purchased on June 30, 2015, at a cost of $105,000.

3.All cars that require depreciation are being depreciated on a straight-line basis with a three-year estimated useful life and a residual value of 30% of original cost.
4. The equipment was purchased for $170,000 on January 2, 2015. The price paid was a bargain because the regular price for this equipment was $218,000. The equipment should last for seven years but will be worthless at that time. However, the company plans to replace it at the end of five years and expects to be able to sell it for $25,000 at that time. The company wants to use the declining-balance method for depreciation with a rate twice the straight-line rate, but has not yet calculated or recorded the depreciation expense for the equipment for the year.
5. Accounts payable is composed of the following balances:

Amounts owing to suppliers ...........................................................................  $119,000
 Loan received from the majority shareholder ...............................................    300,000
                                                                                                                         $419,000

The loan was received from the majority shareholder on October 1, 2015. The loan is repayable over four years with annual payments of $50,000 plus accrued interest at 6% per year. The first payment is due on October 1, 2016. No interest has been accrued on the loan.

6. The bank loan is due on demand and is secured by the cars held for resale.

Required:
a. After adjusting for any errors, prepare a balance sheet for Maple Imports as at December 31, 2015, using the current/non-current presentation. Ignore income taxes.

b. On February 2, 2016, a fire in Maple’s warehouse destroys $30,000 worth of car parts. Unfortunately, Maple did not have insurance to cover this loss. The financial statements for 2015 were not finalized until the end of February 2016. Briefly explain how and why this fire loss should be recognized or disclosed in the 2015 financial statements.