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Using the company information provided by Mr. Jason Tyrell, prepare a statement of income, statement of changes in equity, and statement of financial position for the year ending December 31, 2020.
Mr. Jason Tyrell, a former professional baseball player, started Field of Dreams Ltd, a baseball camp for underprivileged children from ages 6 to 16. Eventually, he would like to open baseball camps across the province of Ontario. Jason has asked you to prepare financial statements at the end of his first year of operations in order to present to a board of directors with the intent of securing further funding for expansion of the camps. He tells you the following facts about the start-up and first year of his business activities.
In order to get the business off the ground, Jason made the decision to incorporate his camp and to follow the IFRS for accrual-based accounting. He sold common shares to himself on January 1, 2020 in the amount of $5000 through the sale of 500 of these shares. In addition, the company borrowed $10,000 on a 10 year term loan from the Royal Bank of Canada. A used bus was purchased for $12,000 cash to be used for transporting the camp participants. Bats, baseballs, gloves and other miscellaneous equipment were purchased with $1,500 cash. The company earned camp tuitions of $100,000 during the year but has collected only $90,000 of this amount so far. Thus, at the end of the year, the company was still owed $10,000 in accounts receivable. The company rents time at the local baseball diamonds owned by the town of Pembroke at Riverside Park. Total field rental costs during the year were $14,000, insurance was $6,000, salaries for coaching staff were $20,000, and administrative expenses were $7,000 – all of which were paid in cash. The company incurred $800 in interest expense on the bank loan, which it still owed at the end of the year. The company also owes $10,440 in income tax. The company paid Jason dividends of $35,000 rather than a salary during the year. The balance in the corporate bank account as at December 31, 2020, was $9,500.