Question

PREPARATION OF FINANCIAL STATEMENTS

STATEMENT OF FINANCIAL POSITION

STATEMENT OF FINANCIAL PERFORMANCE

1. ISM Industries provided the following account balance on December 31, 2019

Share capital	5,000,000.00
Share premium	500,000.00
Retained Earnings	880,000.00
Serial bonds payable (Php500,000.00 due every July 1 of each year)	2,500,000.00
Employees income tax payable	20,000.00
Notes payable	100,000.00
Accrued expenses	30,000.00
Accrued interest on note payable	10,000.00
Income tax payable	60,000.00
Allowance for doubtful accounts	50,000.00
Advances from customers	100,000.00
Accounts receivable	500,000.00
Accumulated depreciation – Building	1,600,000.00
Accumulated depreciation – Machinery	1,300,000.00
Investment in Bonds	1,500,000.00
Land	1,500,000.00
Machinery	2,000,000.00
Factory Supplies	50,000.00
Notes Receivable	150,000.00
Building	4,000,000.00
Cash	420,000.00
Claim receivable	20,000.00
Finished Goods	400,000.00
Franchise	200,000.00
Goods in process	600,000.00
Prepaid insurance	20,000.00
Raw Materials	200,000.00
Trading Securities	250,000.00
Tools	40,000.00
Goodwill	100,000.00
Plant expansion fund	500,000.00
Accounts payable	300,000.00

Required: Prepare a properly classified statement of financial position on December 31, 2019.

Answer 1

ISM Industries
Statement of financial position
As on 31st December, 2019
Assets	Amount $	Amount $
Current Assets
Cash		420,000.00
Accounts receivable	500,000.00
Allowance for doubtful accounts	(50,000.00)	450,000.00
Notes Receivable		150,000.00
Claim receivable		20,000.00
Trading Securities		250,000.00
Prepaid insurance		20,000.00
Factory Supplies		50,000.00
Tools		40,000.00
Inventories
Finished Goods	400,000.00
Goods in process	600,000.00
Raw Materials	200,000.00	1,200,000.00
Current Assets		2,600,000.00
Non Current Assets
Long Term Investments
Investment in Bonds	1,500,000.00
Long Term Investments		1,500,000.00
Plant, Property & Equipment
Land		1,500,000.00
Building	4,000,000.00
Accumulated depreciation– Building	(1,600,000.00)	2,400,000.00
Machinery	2,000,000.00
Accumulated depreciation– Machinery	(1,300,000.00)	700,000.00
Plant, Property & Equipment		4,600,000.00
Intangible Assets
Franchise	200,000.00
Goodwill	100,000.00
Intangible Assets		300,000.00
Other Assets
Plant expansion fund	500,000.00
Other Assets		500,000.00
Total Assets		9,500,000.00
Liabilities & Stockholder's Equity
Liabilities
Current Liabilities
Accounts payable	300,000.00
Advances from customers	100,000.00
Accrued interest on note payable	10,000.00
Income tax payable	60,000.00
Accrued expenses	30,000.00
Employees income tax payable	20,000.00
Current portion of Serial bonds payable	500,000.00
Current Liabilities		1,020,000.00
Non Current Liabilities
Non Current portion of Serial bonds payable	2,000,000.00
Notes payable	100,000.00
Non Current Liabilities		2,100,000.00
Total Liabilities		3,120,000.00
Stockholder's Equity
Share capital	5,000,000.00
Share premium	500,000.00
Retained Earnings	880,000.00
Total Stockholder's Equity		6,380,000.00
Total Liabilities & Stockholder's Equity		9,500,000.00