Question

The trial balance of Swifty Ltd. at December 31, 2020, follows:

		Debits			Credits
Cash		$235,000
Sales revenue					$10,427,000
FV-NI investments (at fair value)		243,000
Cost of goods sold		6,300,000
Bond investment at amortized cost		479,000
FV—OCI investments (fair value $545,000)		478,000
Notes payable (due in six months)					114,000
Accounts payable					725,000
Selling expenses		2,460,000
Investment income or loss*					12,000
Land		320,000
Buildings		1,540,000
Dividends payable					46,000
Income tax payable					100,000
Accounts receivable		665,000
Accumulated depreciation—buildings					312,000
Allowance for doubtful accounts					29,000
Administrative expenses		1,060,000
Interest expense		351,000
Inventory		867,000
Gain on disposal of land					50,000
Dividends		40,000
Notes payable (due in five years)					1,060,000
Equipment		710,000
Bonds payable (due in three years)					1,500,000
Accumulated depreciation—equipment					65,000
Intangible assets—franchises (net)		220,000
Common shares					879,000
Intangible assets—patents (net)		335,000
Retained earnings					902,000
Accumulated other comprehensive income					82,000
Totals		$16,303,000			$16,303,000

^* The investment income or loss relates to the FV-NI investments.

(a)

Prepare a classified statement of financial position as at December 31, 2020. Ignore income taxes. (List Current Assets in order of liquidity. List Property, Plant and Equipment in order of Land, Buildings and Equipment.)

What I don't understand is where the RE and OCI additions subtractions come from. I'm returning my studies after a year half break.

Answer 1

Calculation

Swifty Ltd.
Statement of Comprehensive Income
For the Year Ended December 31, 2020
Sales			$             10,427,000
Less: Cost of goods sold			$               6,300,000
Gross profit			$               4,127,000
Less: Operating expenses
Administrative expenses		$             1,060,000
Selling expenses		$             2,460,000
Total operating expenses			$               3,520,000
Operating income			$                   607,000
Add: Non-operating Income (Expense)
Investment income or loss*		$                   12,000
Gain on disposal of land		$                   50,000
Interest expense		$               (351,000)	$                (289,000)
Income before income taxes			$                   318,000
Income tax expnese			$                              -
Net income (loss)			$                   318,000
Other comprehensive income (loss):
Unrealized gains on investment - OCI (545000-478000)			$                     67,000
Comprehensive Income			$                   385,000

Swifty Ltd.
Statement of change in equity
For the Year Ended December 31, 2020
	Common shares	Retained earnings	Accumulated other comprehensive income	Total Stockholder's Equity
Balance, Jan 1, 2020	$                      879,000	$                 902,000	$                     82,000	$          1,863,000
Net income		$                 318,000		$              318,000
Unrealized gains on investment - OCI			$                     67,000	$                67,000
Dividends		$                 (40,000)		$              (40,000)
Balance, Dec 31, 2020	$                      879,000	$             1,180,000	$                   149,000	$          2,208,000

Answer

Swifty Ltd.
Statement of Financial Position
For the Year Ended December 31, 2020
Current Assets
Cash		$                 235,000
FV-NI investments (at fair value)		$                 243,000
Accounts receivable	$                      665,000
Allowance for doubtful accounts	$                      (29,000)	$                 636,000
Inventory		$                 867,000
Total current assets			$               1,981,000
Non-Current Assets
Property, Plant and Equipment:
Land		$                 320,000
Buildings	$                  1,540,000
Accumulated depreciation—buildings	$                    (312,000)	$             1,228,000
Equipment	$                      710,000
Accumulated depreciation—equipment	$                      (65,000)	$                 645,000
Total Property, Plant and Equipment			$               2,193,000
Long-term Investments
Bond investment at amortized cost		$                 479,000
FV—OCI investments (fair value $545,000)		$                 545,000
Total Long-term Investments			$               1,024,000
Integiable assets
Intangible assets—patents (net)		$                 335,000
Intangible assets—franchises (net)		$                 220,000
Total Integiable assets			$                   555,000
Total assets			$               5,753,000
Liabilties
Current Liabilties:
Accounts payable		$                 725,000
Notes payable (due in six months)		$                 114,000
Income tax payable		$                 100,000
Dividends payable		$                   46,000
Total Current Liabilties			$                   985,000
Non-Current Liabilties:
Bonds payable (due in three years)		$             1,500,000
Notes payable (due in five years)		$             1,060,000
Total Non-Current Liabilties:			$               2,560,000
Total Liabilties			$               3,545,000
Stockholder's Equity
Common shares		$                 879,000
Retained earnings		$             1,180,000
Accumulated other comprehensive income		$                 149,000
Total Stockholder's Equity			$               2,208,000
Total Liabilties and Stockholder's Equity			$               5,753,000