2) During 2020, the president, who is also the principal shareholder in the business, transferred ownership of a vacant piece of land in the Carribbean to the company. A hotel will be constructed on this property beginning in 2021. The cost when the president purchased this property was $10 million and the fair market value, based on the professional appraisal, at the time it was trasferred to the company was $25 million. The president was issued 50,000 common shares in exchange for this land. This transaction has not yet been booked. Additional information that you have gathered to assist in preparing the cash flow statement is as follows: 1) In 2020, equipment was purchased for$250,000. In addition, some equipment was disposed of during the year. 2) Investment income includes a dividend $150,000 received on the temporary investment. Interest income $106,000 was reinvested in temporary investments. in firealears Additional information that you have gathered to assist in preparing the cash flow statement is as follows: 1) in 2020, equipment was purchased for$250,000 . In addition, some equipment was disposed of during the year. 2) Investment income includes a dividend $150,000 received on the temporary investment. Interest income $106,000 was reinvested in temporary investments. and 2019 fiscal years. Following are the financial statements for MC Travel Inc. F 2020 (Please see financial statements on sheet #3) Instructions: From the information on the next page, complete the necessary adjusting entries to record the transactions that have not been booked, and prepare the revised balance sheet and income statement for the year, keeping in mind that comparative figures will need to be restated. Once this is complete, prepare a statement of cash flows in good form using the indirect method for the year ended December 31, 2020. Assume all transaction amounts have been reported in CADS. Please see nhanced Instructions: From the information on the next page, complete the necessary adjusting entries to record the transactions that have not been booked, and prepare the revised balance sheet and income statement for the year, keeping in mind that comparative figures will need to be restated. Once this is complete, prepare a statement of cash flows in good form using the indirect method for the year ended December 31, 2020. Assume all transaction amounts have been reported in CAD$. H MC TRAVEL INC. Balance Sheet December 31, Note: The statements before any adjustments 2020 2019 ASSETS Current assets Cash Temporary investments Accounts receivable Allowance for doubtful accounts Total current assets 7,600,000 2,006,000 5,000,000 -200,000 14,406,000 5,040,000 1,900,000 3,700,000 -100,500 10,539,500 Capital assets Land Building and equipment Accumulated depreciation Total capital assets 250,000 55,270,000 -7,425,000 48,095,000 250,000 55,072,000 -4,950,000 50,372,000 Total assets 62,501,000 60,911,500 H Building and equipment Accumulated depreciation Total capital assets 55,270,000 -7,425,000 48,095,000 55,072,000 4,950,000 50,372,000 Total assets 62,501,000 60,911,500 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable Interest payable Income taxes payable Dividents payable Total current liabilities 3,800,800 30,000 350,000 0 4,180,800 4,100,750 15,000 250,000 100,000 4,465,750 Long term liabilities Long term bank loan Bond payable Future income tax liability Total long term liabilities 5% Miami property due 2019 1,145,000 40,000,000 175,000 41,320,000 807,000 40,000,000 150,000 40,957,000 Long term bank loan Bond payable Future income tax liability Total long term liabilities 5% Miami property due 2019 1,145,000 40,000,000 175,000 41,320,000 807,000 40,000,000 150,000 40,957,000 Total liabilities 45,500,800 45,422,750 Shareholders' equity Common shares Retained earnings Total shareholders' equity 1,000,000 16,000,200 17,000,200 1,000,000 14,488,750 15,483,750 Total liabilities and shareholders' equity Difference : Assets - (Liabilities + Shareholders' equity) 62,501,000 0 60,911,500 0 ms MC TRAVEL INC. Income Statement For The Year Ended December 31, 2020, $ 37,500,000 Sales Expenses: Salaries and wages Purchases from tour operators Depreciation expense Office, general, and selling expenses Bad debt expenses Interest on long-term debt Bond interest expense Total expenses 5,000,000 22,500,000 2,500,000 3,489,800 150,000 30,000 2,000,000 35,669,800 N Income before other income and expenses Investment income Gain on sale of equipment Income before income taxes Income tax expense Net income Difference: Debits - Credits 1,830,200 256,000 73,000 2,159,200 647,750 1,511,450 The method of solution requires indirect method. K During 2020, you were hired as the Chief Financial Officer for MC Travel Inc., a fairly young travel company that is growing quickly. A key accounting staff member has prepared the financial statements, but there are a couple of transactions that have not been recorded yet because she is waiting for your guidance regarding how these transactions should be recorded. In addition, the staff member is not confident in preparing cash flow statements, so you have been asked to prepare this statement for the 2020 year. MC Travel INC. reports under ASPE. The transactions that have not been recorded yet are as follows. 1) On January 1, 2018, the company purchased a small hotel property in Miami for $50 million paying $10 million in cash and issuing a 5% $40 million bond at par to cover the balance. The bond principal is payable on January 1, 2022. When you were hired, and began to review the financial information from previous years, you quickly realized that the land portion of the total purchase price had been capitalized with building, and depreciated. Depreciation has been incorrectly recorded on the building for 2018 2019 and 2020 and the land is still included in the building account. The land portion of the purchase was appraised at $15 million in 2018, and the land is currently worth $17 million. The cost of the property is to be $5 amortized over a 20 year period using the straight-line basis, and a residual value of million. The company's tax rate is 30% ) During 2020, the president, who is also the principal shareholder in the business, transferred ownership of vacant niece of land in the carrihhaan to the remnany A hotel will be constructed on thic nmnerty 2) During 2020, the president, who is also the principal shareholder in the business, transferred ownership of a vacant piece of land in the Carribbean to the company. A hotel will be constructed on this property beginning in 2021. The cost when the president purchased this property was $10 million and the fair market value, based on the professional appraisal, at the time it was trasferred to the company was $25 million. The president was issued 50,000 common shares in exchange for this land. This transaction has not yet been booked. Additional information that you have gathered to assist in preparing the cash flow statement is as follows: 1) In 2020, equipment was purchased for$250,000. In addition, some equipment was disposed of during the year. 2) Investment income includes a dividend $150,000 received on the temporary investment. Interest income $106,000 was reinvested in temporary investments. in firealears Additional information that you have gathered to assist in preparing the cash flow statement is as follows: 1) in 2020, equipment was purchased for$250,000 . In addition, some equipment was disposed of during the year. 2) Investment income includes a dividend $150,000 received on the temporary investment. Interest income $106,000 was reinvested in temporary investments. and 2019 fiscal years. Following are the financial statements for MC Travel Inc. F 2020 (Please see financial statements on sheet #3) Instructions: From the information on the next page, complete the necessary adjusting entries to record the transactions that have not been booked, and prepare the revised balance sheet and income statement for the year, keeping in mind that comparative figures will need to be restated. Once this is complete, prepare a statement of cash flows in good form using the indirect method for the year ended December 31, 2020. Assume all transaction amounts have been reported in CADS. Please see nhanced Instructions: From the information on the next page, complete the necessary adjusting entries to record the transactions that have not been booked, and prepare the revised balance sheet and income statement for the year, keeping in mind that comparative figures will need to be restated. Once this is complete, prepare a statement of cash flows in good form using the indirect method for the year ended December 31, 2020. Assume all transaction amounts have been reported in CAD$. H MC TRAVEL INC. Balance Sheet December 31, Note: The statements before any adjustments 2020 2019 ASSETS Current assets Cash Temporary investments Accounts receivable Allowance for doubtful accounts Total current assets 7,600,000 2,006,000 5,000,000 -200,000 14,406,000 5,040,000 1,900,000 3,700,000 -100,500 10,539,500 Capital assets Land Building and equipment Accumulated depreciation Total capital assets 250,000 55,270,000 -7,425,000 48,095,000 250,000 55,072,000 -4,950,000 50,372,000 Total assets 62,501,000 60,911,500 H Building and equipment Accumulated depreciation Total capital assets 55,270,000 -7,425,000 48,095,000 55,072,000 4,950,000 50,372,000 Total assets 62,501,000 60,911,500 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable Interest payable Income taxes payable Dividents payable Total current liabilities 3,800,800 30,000 350,000 0 4,180,800 4,100,750 15,000 250,000 100,000 4,465,750 Long term liabilities Long term bank loan Bond payable Future income tax liability Total long term liabilities 5% Miami property due 2019 1,145,000 40,000,000 175,000 41,320,000 807,000 40,000,000 150,000 40,957,000 Long term bank loan Bond payable Future income tax liability Total long term liabilities 5% Miami property due 2019 1,145,000 40,000,000 175,000 41,320,000 807,000 40,000,000 150,000 40,957,000 Total liabilities 45,500,800 45,422,750 Shareholders' equity Common shares Retained earnings Total shareholders' equity 1,000,000 16,000,200 17,000,200 1,000,000 14,488,750 15,483,750 Total liabilities and shareholders' equity Difference : Assets - (Liabilities + Shareholders' equity) 62,501,000 0 60,911,500 0 ms MC TRAVEL INC. Income Statement For The Year Ended December 31, 2020, $ 37,500,000 Sales Expenses: Salaries and wages Purchases from tour operators Depreciation expense Office, general, and selling expenses Bad debt expenses Interest on long-term debt Bond interest expense Total expenses 5,000,000 22,500,000 2,500,000 3,489,800 150,000 30,000 2,000,000 35,669,800 N Income before other income and expenses Investment income Gain on sale of equipment Income before income taxes Income tax expense Net income Difference: Debits - Credits 1,830,200 256,000 73,000 2,159,200 647,750 1,511,450 The method of solution requires indirect method. K During 2020, you were hired as the Chief Financial Officer for MC Travel Inc., a fairly young travel company that is growing quickly. A key accounting staff member has prepared the financial statements, but there are a couple of transactions that have not been recorded yet because she is waiting for your guidance regarding how these transactions should be recorded. In addition, the staff member is not confident in preparing cash flow statements, so you have been asked to prepare this statement for the 2020 year. MC Travel INC. reports under ASPE. The transactions that have not been recorded yet are as follows. 1) On January 1, 2018, the company purchased a small hotel property in Miami for $50 million paying $10 million in cash and issuing a 5% $40 million bond at par to cover the balance. The bond principal is payable on January 1, 2022. When you were hired, and began to review the financial information from previous years, you quickly realized that the land portion of the total purchase price had been capitalized with building, and depreciated. Depreciation has been incorrectly recorded on the building for 2018 2019 and 2020 and the land is still included in the building account. The land portion of the purchase was appraised at $15 million in 2018, and the land is currently worth $17 million. The cost of the property is to be $5 amortized over a 20 year period using the straight-line basis, and a residual value of million. The company's tax rate is 30% ) During 2020, the president, who is also the principal shareholder in the business, transferred ownership of vacant niece of land in the carrihhaan to the remnany A hotel will be constructed on thic nmnerty