1 a) Construct a balance sheet out of the following information. This is like a puzzle where you have to put the pieces in the correct place. You have to identify the accounts below as to whether they are an asset or a liability. Remember that the balance sheet needs to balance on both sides. Try to make it look like a proper balance sheet with the heading, sections, etc.
b) Comment on the liquidity of the Redpart Company based on the balance sheet information given. Please substantiate your responses with relevant financial ratios.
c) If you were a bank, would you lend money to this company? Why
or why not? Please substantiate your responses with relevant
financial ratios.
Redpart Company Balance Sheet as at November 30, 2016
Cash $2,000
Bank Loan $36,000
Accounts Receivable $5,000
Prepaid Insurance $1,000
Accounts Payable $21,000
Building $125,000
Truck $20,000
Accumulated Depreciation $23,000
Owner’s Equity ????
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