QUESTION 1 [18 Marks] Mortdale Ltd Balance Sheet as at 30 June 2014 Assets S Liabilities S Cash 243,000 Accounts payable 300,000 Accounts receivable (net of 310,000 Wages payable 10,000 allowance of $12,000) Uneamed revenue 162 000 Inventory\" 320 000 Total Current Liabilities 472,000 Total Current Assets 373 000 Long-term debt 0 Land 1,520,000 Total Liabilities 472,000 Equipment 3,000,000 Less: accumulated dep'n (Equip) (640,000) Shareholders' Equity Total Non-current Assets 3,330,000 Share capital 4,040,000 Retained profits 246 000 Total Shareholders' Equity 4 236 000 Total Liabilities and Total Assets 4 753 000 Shareholders' Equity 4 753 000 * 3,200 items at $100 each (company only sells one product and uses the FIFO method) The following transactions occurred during the year ended 30 June 2015: (a) Purchased 100 items of inventory at $120 each on credit. (b) Paid $120,000 in cash to accounts payable. (c) Sold 2,000 items at $200 each. All sales are on credit. (d) Collected $121,000 in cash from accounts receivable. (e) Depreciated equipment for the year using the straight-line method (the expected economic life of equipment is 5 years with no residuallscrap value). (f) Dividends declared and paid in cash totalled $100,000. (9) Mortdale Ltd borrowed $400,000 on 1 January 2015. The repayment of the loan is due on 30 June 2019 and carries a 8% per annum interest rate. Mortdale Ltd has paid $12,000 interest on this loan during the year ended 30 June 2015. (h) On 1 May paid $24,000 cash for an insurance policy covering the period 1 June 2015 to 30 June 2016. (i) Paid wages of $200,000 in cash during the year. (j) Mortdale Ltd was paid $11,000 interest by the bank during the year. (k) Wrote off a bad debt for $8,000 as a customer, Noosa Ltd, notied Mortdale Ltd that it had gone into bankruptcy during the 2015 nancial year. (I) Management of Mortdale Ltd increased the allowance for doubtful debts to $14,000. Additional information from Mortdale Ltd's balance sheet as at 30 June 2015: o The account balance of Bank Interest Receivable was $5,500; a The account balance of Uneamed Revenue was $50,000; 0 The account balance of Wages Payable was $30,000