The statement of financial position of Sargent Corporation follows for the current year, 2020: The following additional
Question:
The statement of financial position of Sargent Corporation follows for the current year, 2020:
The following additional information is available:1. The Current Assets section includes the following: cash $150,000; accounts receivable $170,000, less $10,000 allowance for doubtful accounts; inventory $180,000; and unearned revenue $5,000.
The cash balance is composed of $190,000, less a bank overdraft of $40,000 (at a separate financial institution). Inventory is stated at the lower of FIFO cost and net realizable value.
2. The Investments section includes the following: note receivable from a related company, due in 2026, $40,000; FV-NI investments in shares $80,000 (fair value $80,000); FV-OCI investments in shares $125,000 (fair value $155,000); bond sinking fund $250,000; and patents $115,000, net of accumulated amortization.
3. Property, Plant, and Equipment include buildings $1,040,000, less accumulated depreciation $360,000; equipment $450,000, less accumulated depreciation $180,000; land $500,000; and land held for future use $270,000.
4. Intangible Assets include franchise, net of accumulated amortization, $265,000.
5. Current Liabilities include the following: accounts payable $140,000; notes payable, short-term $80,000, long-term $120,000; and income tax payable $40,000.
6. Long-term Liabilities are composed solely of 7% bonds payable issued at a discount, due in 2028.
7. Shareholders? Equity has 70,000 preferred shares (200,000 authorized), which were issued for $450,000, and 100,000 common shares (unlimited number authorized), which were issued at an average price of $10 per share. In addition, the corporation has retained earnings of $290,000 and accumulated other comprehensive income of $30,000.
Instructions
a. Prepare a statement of financial position in good form. (Adjust the amounts in each SFP classification based on the additional information.)
b. Digging Deeper What makes the condensed format of the original SFP inadequate in terms of the amount of detail that needs to be disclosed under IFRS and ASPE?
Accounts PayableAccounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Step by Step Answer:
a Sargent Corporation Statement of Financial Position December 31 2020 Assets Current assets Cash 190000 FV NI investments 80000 Accounts receivable 1...View the full answer
Intermediate Accounting Volume 1
ISBN: 978-1119496496
12th Canadian edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
