Question

Ayayai Corp. has decided to expand its operations. The bookkeeper recently completed the following statement of financial position in order to obtain additional funds for expansion:

AYAYAI CORP. Statement of Financial Position For the Year Ended December 31, 2020
Current assets
	Cash (net of bank overdraft of $31,000)		$	270,000
	Accounts receivable (net)			349,000
	Inventory at the lower of cost and net realizable value			411,000
	FV-NI investments (at cost—fair value $130,000)			150,000
Property, plant, and equipment
	Buildings (net)			580,000
	Equipment (net)			170,000
	Land held for future use			185,000
Intangible assets
	Goodwill			81,000
	Investment in bonds to collect cash flows, at amortized cost			91,000
	Prepaid expenses			13,000
Current liabilities
	Accounts payable			205,000
	Notes payable (due next year)			135,000
	Pension obligation			83,000
	Rent payable			50,000
Long-term liabilities
	Bonds payable			564,000
Shareholders’ equity
	Common shares, unlimited authorized, 300,000 issued			300,000
	Contributed surplus			190,000
	Retained earnings			?

(a)

Prepare a revised statement of financial position using the available information. Assume that the bank overdraft relates to a bank account held at a different bank from the account with the cash balance. Assume that the accumulated depreciation balance for the buildings is $170,000 and that the accumulated depreciation balance for the equipment is $115,000. The allowance for doubtful accounts has a balance of $18,000. The pension obligation is considered a long-term liability. (List Current Assets in order of liquidity. List Property, Plant and Equipment in order of Land, Buildings and Equipment.)

Answer 1

Ayayai spruce corp.
Statement of financial position
For the year ended December 31, 2020
Assets	Amount	Amount
Current assets
Cash	270000
Add: Bank overdraft	31000	301000
Account Receivables	367000
Less: doubtful Debts	18000	349000
Inventory		411000
FV-NI investment		130000
Prepaid expenses		13000
Property, plant, and equipment
Building		580000
Equipment		170000
Land held for future use		185000
Intangible assets
Goodwill		81000
Investments
Investment in bonds to be held until maturity		91000
Total		2,311,000
Liabilities
Current liabilities
Accounts payable		205000
Notes payable		135000
Rent payable		50000
Bank over draft		31000
Long tem liabilities
Bonds payable		564000
Pension Obligation		83000
Shareholder's equity
Common shares, unlimited authorized
Issued shares		300000
Contributed to surplus		190000
Retained Earnings (Balance figure)		753000
Total		2,311,000