The statement of financial position of Basilica Corp. at December 31, 2020 was prepared as follows:

Basilica Corp.

Statement of Financial Position

December 31, 2020

Cash	$ 40,250 (1)		Current Liabilities	$ 237,500
Accounts Receivable (net)	85,550 (2)		Long-term Liabilities	437,500
Inventories	105,000 (3)		Shareholders Equity	494,800
Investments	60,000 (4)
Land	350,000 (5)
Building (net)	525,000 (6)
Copyright (net)	4,000 (7)
	$1,169,800			$1,169,800

The following additional information is provided:

1. The cash balance includes:

Petty cash fund	$ 250
Cash advance to employee, payable on demand	1,000
Saving Account at TD Bank	23,000
Certificate of deposit (90-days)	10,000 10333333,00038,000
Chequing account at the Bank of Montreal	6,750
Bank overdraft at the Scotia Bank	(750)
Total	$ 40,250

2. The allowance for doubtful accounts $7,750.

3. The net realizable value of the inventory that is included in the Statement of Financial Position is $100,000. Inventories do not include $15,000 of merchandise that was in transit at December 31, which was sold to a customer with terms f.o.b. destination. The inventory reached the customer on January 5, 2020. In addition, inventories also do not include $20,000 of inventory that was received by Manga Ltd. for consignment.

4. The investments section includes the following:

• notes receivable that was issued on September 1^st, 2020 bearing interest at 6% and due on August 31, 2021 $20,000;
• long-term FV-OCI investment $30,000 carrying value (fair value $26,000 at December 31, 2020);
• FV-NI Investment 500 common shares of Bilkin Inc. purchased at $10.00 per share (fair value $11.50 per share at December 31, 2020). The company expects to sell the FV-NI shares as soon as the market price increases next year.

5. The land balance includes land used for operations and recorded at its appraised value of $350,000 (the original cost of the land was $275,000). The company uses the historical cost method to account for property, plant & equipment.

6. The building originally cost $750,000. Depreciation for 2020 has already been recorded.

7. The copyright originally cost $10,000 and is being amortized over 5 years on a straight-line basis. Amortization for 2020 had already been recorded.

8. The company borrowed $50,000 from XYZ Bank. The bank charges 5% and the loan is due May 1^st 2026. As part of the bank loan XYZ Bank required Basilica Corp. to pledge their building as security for the loan (in other words it is the banks collateral).

Instructions:

1. List two items that should be excluded from cash and cash equivalents from point 1 and explain. (2 marks)
2. Explain whether the two inventory items mentioned in point 3 should be included or excluded from Basilica Corp.s inventory and why. (4 marks)
3. The company is a Canadian public company. Restate the asset side of Basilicas Statement of Financial Position sheet at December 31, 2020 in good form. The categories are: Current Assets, Long-term Investments, Property, Plant & Equipment and Intangible Assets. You can refer to chapter 5, 7, 8, 9, 10 and 11. (16 marks)
4. Given part (c) identify the disclosure requirements. (4 marks)
5. Assuming the Accumulated Other Comprehensive Income was $10,000 credit balance at the beginning of 2020, what would be the Accumulated Other Comprehensive Income at the end of the 2020? (1 mark)
6. Peer evaluation. Only submit/e-mail this if a student in your group did not contribute a lot to the group assignment. (3 marks)

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