Below is the trial balance in no particular order for Hughey Ltd. as at December 31, 2021:

Hughey Ltd.

Trial Balance

As at December 31, 2021

Debits Credits

Cash $ 250,000

Accounts receivable 1,015,000

Allowance for doubtful accounts $ 55,000

Prepaid rent 40,000

Inventory 1,300,000

Investments - available for sale (FVOCI) 2,100,000

Land 530,000

Building 770,000

Patents (net) 25,000

Equipment 2,500,000

Accumulated depreciation, equipment 1,200,000

Accumulated depreciation, building 300,000

Accounts payable 900,000

Accrued liabilities 300,000

Notes payable 600,000

Bond payable 1,100,000

Common shares 2,500,000

Accumulated other comprehensive income 245,000

Retained earnings 1,330,000

$ 8,530,000 $ 8,530,000

Additional information as at December 31, 2021:

1. The inventory has a net realizable value of $1,350,000. The company uses FIFO method of inventory valuation.

2. Investments in available for sale securities (FVOCI) have a fair value of $2,250,000.

3. The company purchased patents of $60,000 on January 1, 2015.

4. Bonds are 8%, 25-year and pay interest annually each January 1, and are due December 31, 2030.

5. The 7%, notes payable represent bank loans that are secured by investments in available for sale securities (FVOCI) with a carrying value of $800,000. Interest is paid each December 31 and no principal is due until its maturity on April 30, 2022.

6. The capital structure for the common shares are # of authorized, 100,000 shares; issued and outstanding, 80,000 shares.

Required:

a. prepare a classified statement of financial position as at December 31, 2021, in good form, including all required disclosures identified in Chapter 4.

b. Calculate the annual amortization for the patent.

c. Does this company follow IFRS or ASPE? Explain your answer.