Agata Polanska opened her first Pierogi Factory restaurant in Kitchener, Ontario in 2015. Customers love her authentic Polish pierogi, so Agata has steadily expanded her business to include four restaurants and a central kitchen facility. Pierogi Factory Ltd.s most recent fiscal year ended on December 31, 2020.

Requirements

How much in total resources does the Pierogi Factory have to work with at December 31, 2020? How much does the Pierogi Factory owe to creditors at December 31, 2020? How much of the companys assets does Agata have a claim to?

Pierogi Factory Ltd. owns the land on which the kitchen facility is located. Its original cost was $250,000 back in 2017. In late December, Agata had the property appraised in anticipation of financing she may seek in the near future. The appraiser assessed its market value at around $500,000. Does the propertys increased market value affect anything reported in the companys 2020 financial statements? Explain your answer.

Pierogi Factory sells gift cards to customers. When it sells a gift card, it debits Cash and credits Unredeemed Gift Cards, a current liability. Why does Pierogi Factory record the initial sale of a Gift Cards as a liability instead of as revenue?