E5.5 (LO 3, 4, 11) (Correction of Statement of Financial Position) The bookkeeper for Garfield Corp. has prepared the following statement of financial position as at July 31, 2020: Garfield Corp. Statement of Financial Position As at July 31, 2020 Cash $ 69,000 Accounts receivable (net) 40,500 Inventory 60,000 Equipment (net) 84,000 Patents (net) 21,000 $274,500 Notes and accounts payable $ 44,000 Long-term liabilities 75,000 Shareholders' equity 155,500 $274,500 The following additional information is provided: 1. Cash includes $1,200 in a petty cash fund and $12,000 in a bond sinking fund. 2. The net accounts receivable balance is composed of the following three items: (a) accounts receiv- able debit balances $52,000; (b) accounts receivable credit balances $8,000; and (c) allowance for doubtful accounts $3,500. 3. Inventory costing $5,300 was shipped out on consignment on July 31, 2020. The ending inventory balance does not include the consigned goods. Receivables of $5,300 were recognized on these con- signed goods. 4. Equipment had a cost of $112,000 and an accumulated depreciation balance of $28,000. 5. Income tax payable of $9,000 was accrued on July 31. Garfield Corp., however, had set up a cash fund to meet this obligation. This cash fund was not included in the cash balance, but was offset against the income tax payable account. 6. Long-term liabilities are bonds payable issued at par, due in 2025. 7. Shareholders' equity is made up of two account balances: Common Shares of $105,000 and Retained Earnings of $50,500.