Question 2: Balance Sheet Build and Analysis (20 Marks) . . . . . . The Common Ground Coffeehouse (Coro), a student run coffee shop on Queen's University campus, has the following financial information as of December 31, 2021: Cash ending balance is $ 35,923 Buildings & Equipment ending balance is $105,846 Accounts Receivables ending balance is $10,638 Common Shares ending balance is $76,298 Inventory ending balance is $62.967 Land ending balance is $278,193 Accounts Payable ending balance is $12,091 Retained Earnings ending balance is $114,297 Buildings & Equipment Accumulated Depreciation ending balance is $47.000 Wages Payable ending balance is $63,875 Short-Term Debt ending balance is $10,000 Taxes Payable ending balance is $23.185 Long-Term Mortgage ending balance is $109,238 10-Year Bond ending balance is $25,500 Interest Payable ending balance is $12,083 1. Prepare a 2021 Balance Sheet for the company. Ensure you categorize your accounts into Current and Non-Current Assets/Liabilities, and Shareholders' Equity. (6 marks) 2. Calculate the Debt-to-Equity and Current Ratio of the company. Explain what these ratios are and what they are used for. Comment on the company's financial position, based on the ratios you calculated. (6 marks) . . . . 2 3. In 2022, the company plans to purchase additional retail space in the ARC. This space will cost $90,000. 70% of the purchase will be added to long term mortgage, and the rest in cash. A new kind of coffee bean hits the market and there is great demand for CoGro to buy and sell the coffee bean to Queen's students. Unfortunately, this new coffee bean is extremely expensive and CoGro, strapped for cash, takes out a $10,000 Short Term loan to buy the new beans. Impressed with CoGro's new coffee bean, the dean of Queen's gives the company a $20.000 donation. However, the donation stipulates that 50% of the donation must go to the hard-working CoGro employees and the rest be placed in a 10-year bond for the future. (a) Describe the effect that these transactions will have on the 2022 Balance Sheet - Hint: Use the 2021 Balance Sheet created early and apply these transactions to it. (4 marks) (b) With your new balance sheet, re-calculate the Debt-to-Equity and Current Ratio. Has CoGro done worse or better over the past year using these ratios to comment on the financial prospective. (4 marks)