Ron Abrams has come into your office for his weekly 1 on 1 in which you update him on your weekly progress on your projects. He has arrived with a stack of paperwork in his hands and a befuddled look on his face. You ask whats going on and he responds as follows. Last year, as you know, we purchased a bankrupt, closed down bottling facility in The Ukraine. I dont know if you know this but in countries other than Canada they are using somewhat different accounting policies than we do, and the reports I have for the first few months of operations for that location look nothing like anything I have seen before. Im aware that the company made no money this month as its had no sales or operations, but I cannot understand our capital position. Im leaving you with a new project. I know youve been learning accounting so I want you to take the opening information for the business from the date of purchase and come up with the balance sheet as it should appear to me as a Canadian Reader. You are somewhat puzzled with this new challenge, yet flattered at the same time, and agree to take it on.

Given:

The newly purchased firm was bought on November 1. At inception the balance sheet accounts of the firm were as follows:

Account Name	$		Account Name	$
Accounts Payable	85,000		Bonds Payable (Over 1 Year)	45,000
Accounts Receivable	67,000		Share Capital	936,200
Land	490,000		Furniture and Fixtures	15,000
Building	320,000		Wages Payable	55,000
Equipment	175,000		Bottle Processing Patent Fee's Payable	25,000
Cash	2,200		Taxes Payable	58,000
Notes Payable	60,000		Bottle Inventory	195,000

During the month of November the following transactions occurred:

Accounts Receivable for $16,000 was collected.

Wages due of $15,000 were paid out in cash.

$175,000 in Equipment was purchased on credit ($100 was due on delivery and was paid in cash).

Their land was appraised and found to be worth $560,000.

A stakeholder, Bruce Wayne, provided the company with equipment and in return received $65,000 in shares.

$300,000 in shares was retired for bonds payable on December 15, 2025.

Bottle Processing Patent Fees were paid completely out on Credit.

$175,000 in Old Bottles was returned to the former supplier for their cash value.

A bank loan for $65,000 was taken out. The amount was kept in cash over the end of the month.

Ron Abrams, VP Operations for Wilson Bros. has come wandering into your office muttering under his breath (clearly exasperated) after reading the financial statements for one of the plants in Western Europe. After composing himself somewhat he says, "How can a Canadian finance executive sign off on these statements? They look nothing like any statement Ive seen in Canada before! I know we paid a translator to present these in English, but I cannot make heads or tails of these. Are we profitable there or not?"

Knowing what you have read about financial statements briefly describe if these financial statements could be correct, and if so why? (8 marks)

Provide constructive feedback to at least two other students postings. (2 marks)