Question 1 (12 Marks, 30 minutes) Indiana Jones Inc. Income statement Year ended December 31, 2013 Indiana Jones Inc Statement of Financial Position 31-Dec 2013 2013 2012 Sales Assets Current assets Cash Accounts receivable Inventories Prepaid expenses Total current assets $ 37,800 203,800 122,500 18,400 382,500 $ 48,400 157,000 92,850 26,000 324,250 $ 506,780 185,460 321,320 116,410 204,910 Cost of goods sold Gross profit Operating expenses Profit from operations Other expenses and losses Interest expense Profit before income tax Income tax expense Profit 4,730 200,180 45,000 $ 155,180 Property plant & equipment Equipment 270,000 242,500 Less: Accumulated depreciation Equipment (50,000) (52,000) Total property plant & Equipment 220,000 190,500 Total assets S 602,500 $$14.750 Liabilities & Shareholders' Equity Current Liabilities Accounts payable Accrued liabilities Total current liabilities $ 93,000 11,500 104,500 $ 77,300 7,000 84,300 Bank loan payable Total liabilities 50,000 154,500 150,000 234,300 Shareholders Equity Common shares Retained earnings Total shareholders' equity 200,000 248,000 448,000 175,000 105,450 280,450 Total liabilities and shareholders' equity $ 602,500 S 514,750 Additional Information: Prepaid expenses and accrued liabilities are operating expenses. New equipment costing $85,000 was purchased and paid in cash Old equipment having an original cost of $57,500 was sold for $15 Accounts payable relate to merchandise creditors. A portion of the bank loan was repaid during the year. A dividend was paid during the year and common shares were is de 146.500 depreciation expense and $7,500 loss on sale of equipment