The following shows the financial statements of Cruel Summer Corporation for the year

2019.

Cruel Summer Corporation

Statement of Financial Position

As of December 31, 2019

Assets Liabilities and Capital

Current assets P 1,881,100 Current liabilities P 962,400

Other assets 5,171,400 Long-term liabilities 1,439,500

Capital 4,650,600

P7,052,500 P7,052,500

An analysis of current assets discloses the following:

Cash (restricted in the amount of P400,000 for plant

expansion) 571,000

Investment in land 185,000

Accounts receivable less allowance of P30,000 480,000

Inventories 645,100

1,881,100

Other assets include:

Prepaid expenses 47,400

Plant and equipment less accumulated

depreciation of P1,430,000 4,130,000

Cash surrender value of life insurance policy 84,000

Unamortized bond discount 49,500

Notes receivable (short term) 162,300

Goodwill 252,000

Land 446,200

Total 5,171,400

Current liabilities include:

Accounts payable 510,000

Notes payable (due 2012) 157,400

Income tax payable 145,000

Share premium reserve 150,000

962,400

Long-term liabilities include:

Unearned revenue 489,500

Dividends payable 200,000

8% bonds payable (due May 1, 2023) 750,000

1,439,500

Capital includes:

Retained earnings 2,810,600

Share capital, par value P10; authorized

200,000 shares, 184,000 shares issued 1,840,000

Total 4,650,600

The supplementary information below is also provided:

a. On May 1, 2019, the company issued 93.4, P750,000 of bonds to finance plant expansion.

The long-term bond agreement provided for the annual payment of interest every May 1.

The existing plant was pledged as security for the loan. Use straight-line method for

discount amortization. (Hint: To get the total discount, simply multiply the face value by

93.4% and subtract this from the face value. The difference is the discount to be amortized

over 5 years on a straight-line basis).

b. The bookkeeper made the following mistakes:

1. In 2017, the ending inventory was overstated by P183,000. The correct ending

inventories for 2018 and 2019 were correctly computed.

2. In 2019, accrued wages in the amount of P275,000 were omitted from the

statement of financial position and these expenses were not recognized in profit or

loss.

3. In 2019, a gain of P175,000 (net of tax) on the sale of certain plant assets was

credited directly to retained earnings.

c. You learned on January 28, 2020, prior to the issuance of financial statements that a heavy

damage was sustained because of a recent fire in one of Cruel Summer's two plants; the

loss will not be reimbursed by insurance. The plant has a carrying amount of P1,200,000

on the date of fire. Hint: review the lesson on Adjusting and Non-Adjusting Events.

Requirement: help me Provide a properly classified Statement of Financial Position withaccompanying notes