One of the shareholders of Canadian Cookies and Cakes Ltd. is considering selling her shares, which represent one-third of the companys outstanding shares. The company is preparing its financial statements, which will be used by the shareholder to help determine the value of her shares. The following transactions have occurred since the shop started operations at the beginning of the year

1. 2. 3. 4. The company borrowed $30,000 from the bank to help get the business started, and repaid $10,000 of this before year end. Shareholders also paid $30,000 for their shares when the company started. Ingredients costing $40,000 were purchased on account, and 80% of these ingredients were used in goods that were baked and sold during the year. Before the end of the year, payments of $33,000 were made for these ingredients. Baking ovens were rented for $10,800 cash, paid at the rate of $900 per month. At the end of the year, the company purchased its own ovens for $44,000 cash. Employees earned wages of $35,000 during the year. The company withheld income taxes of $3,500 from their paycheques, which it will forward to the Canada Revenue Agency (CRA) early next year. In other words, although the employees' wages were $35,000, the company deducted income taxes and paid only the remaining $31,500 net amount to the employees; it will pay the $3,500 of income taxes directly to the CRA. (Note that these income taxes relate to the employees' earnings, not the company's earnings. Consequently, they are recorded as part of the company's wage expense, not as income taxes expense.) Interest on the bank loan for the year totalled $1,560, but has not yet been paid. Various other expenses totalled $15,000 for the year, but only $13,600 of this amount was paid before the end of the year. After $100,560 was collected from the sale of goods (which was the full sales amount), the cash balance at the end of the year was $17,660, and net income of $6,200 was reported. 5. 6. 7. (a) Show calculations to prove that the ending cash balance was $17,660 and the net income for the year was $6,200. (Enter loss using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) Calculation of cash on hand at end of year: Cash received: $ Bank loan + $ Cash paid out: Payment of other expenses $ . $ Calculation of net earnings for the year: $ $ $ $ $