Question 5 (18 marks) Wright Corporation had the following permanent accounts and ending balances on December 31, 2019 (before adjusting entries): Dr. (S) Cr. (S) Cash 400,000 Equipment 1,600,000 Bonds payable 950,000 Retained earnings 300,000 Allowance for Doubtful Accounts 9,000 FV-OCI investments 600,000 Inventory 720.000 Accumulated Depreciation- 120,000 Equipment Accounts payable 560,000 Accounts receivable 320,000 Common shares 1,700,000 Accumulated OCI 30,000 Prepaid insurance 20,000 FV-NI investments 180,000 There were no transactions recorded in Allowance for Doubtful Accounts during the year. The company should recognize bad debt expenses for $7.000 at the end of 2019. The company prepaid $20,000 for one-year insurance becoming effective on April 1, 2019. The company purchased the equipment on July 1 2017 and estimated that the useful life of the equipment is 20 years and there is no residual value of the equipment. The company adopted straight-line method to account for depreciation. On December 31, 2019, the fair values of FV-NI investment and FV-OCI investments were $200,000 and $520,000, respectively. The company used the perpetual inventory system. The net realizable value of inventory was $690,000 as of December 21, 2019. There were no accrued interest and discount premium on bonds, and other accrual items. Please do not consider the income tax effect. Required: Prepare a statement of financial position as at December 31, 2019, presenting assets and liabilities in order of liquidity. Question 5 (18 marks) Wright Corporation had the following permanent accounts and ending balances on December 31, 2019 (before adjusting entries): Dr. (S) Cr. (S) Cash 400,000 Equipment 1,600,000 Bonds payable 950,000 Retained earnings 300,000 Allowance for Doubtful Accounts 9,000 FV-OCI investments 600,000 Inventory 720.000 Accumulated Depreciation- 120,000 Equipment Accounts payable 560,000 Accounts receivable 320,000 Common shares 1,700,000 Accumulated OCI 30,000 Prepaid insurance 20,000 FV-NI investments 180,000 There were no transactions recorded in Allowance for Doubtful Accounts during the year. The company should recognize bad debt expenses for $7.000 at the end of 2019. The company prepaid $20,000 for one-year insurance becoming effective on April 1, 2019. The company purchased the equipment on July 1 2017 and estimated that the useful life of the equipment is 20 years and there is no residual value of the equipment. The company adopted straight-line method to account for depreciation. On December 31, 2019, the fair values of FV-NI investment and FV-OCI investments were $200,000 and $520,000, respectively. The company used the perpetual inventory system. The net realizable value of inventory was $690,000 as of December 21, 2019. There were no accrued interest and discount premium on bonds, and other accrual items. Please do not consider the income tax effect. Required: Prepare a statement of financial position as at December 31, 2019, presenting assets and liabilities in order of liquidity
