Question

Problem 5-9 a The statement of financial position of Bramble Corporation follows for the current year, 2020: BRAMBLE CORPORATION Statement of Financial Position December 31, 2020 Current assets $523,800 Current liabilities Investments 691,200 Long-term liabilities Property, plant, and equipment 1,857,600 Shareholders' equity Intangible assets 286,200 $3,358,800 $410,400 1,036,800 1,911,600 $3,358,800 The following additional information is available: 1. The current assets section includes the following: cash $162,000; accounts receivable $183,600, less $10,800 allowance for doubtful accounts; inventory $194,400; and unearned revenue $5,400. The cash balance is composed of $205,200, less a bank overdraft of $43,200 (at a separate financial institution). Inventory is stated at the lower of FIFO cost and net realizable value. 2. The investments section includes the following: note receivable from a related company, due in 2026, $43,200; FV-NI investments in shares $86,400 (fair value $86,400); FV-OCI investments in shares $135,000 (fair value $167,400); bond sinking fund $270,000; and patents $124,200, net of accumulated amortization. 3. Property, Plant, and Equipment include buildings $1,123,200, less accumulated depreciation $388,800; equipment $486,000, less accumulated depreciation $194,400; land $540,000; and land held for future use $291,600. 4. Intangible Assets include franchise, net of accumulated amortization, $286,200. 5. Current liabilities include the following: accounts payable $151,200; notes payable, short-term $86,400, long-term $129,600; and income tax payable $43,200. 6. Long-term liabilities are composed solely of 7% bonds payable issued at a discount, due in 2028. 7. Shareholders' equity has 70,000 preferred shares (200,000 authorized), which were issued for $486,000, and 108,000 common shares (unlimited number authorized), which were issued at an average price of $10 per share. In addition, the corporation has retained earnings of $313,200 and accumulated other comprehensive income of $32,400. (a) Prepare a statement of financial position in good form. (Adjust the amounts in each SFP classification based on the additional information.) (List Assets in order of liquidity. List Property, Plant and Equipment in order of Land, Buildings and Equipment.)

Answer 1

Bramble corporation Statement of Financial Position December 31, 2020 Assets Current assets: $205,200 Cash FV-NI investments (at fair value) Accounts Receivable Less: Allowance for Doubtful Accounts $86,400 $183,600 S10,800 S172,800 S194,400 Inventory (at lower of FIFO cost and net realizable vahue) Total current assets Long-term investments: Note receivable (due in 2026) FV-OCI investments (at fair vahue) Bond sinking Fund Land held for future use Total long-term investments Property, plant, and equipment: Land S658,800 $43,200 $167,400 S270,000 $291,600 $772,200 $540,000 Buildings Less: Accumulated Depreciation-Buildings Equipment Less: Accumulated Depreciation-Equipment Total Property, plant, and equipment: Intangible assets: Patents, net of accumulated amortization Franchise, net of accumulated amortization Total Intangible assets Total assets $1,123,200 $388,800 $734,400| $486,000 S194,400 S291,600| $1,566,000 $124,200 $286,200 $410,400 S3,407,400 Liabilities and Stockholders' Equity Current liabilities: Accounts Payable Notes Payable (Short term) Income tax Payable Bank overdraft Unearned revenue $151,200 S86,400 $43,200 $43,200 $5,400 Total current liabilities Long-term debt: Bonds payable (due in 2028) Note payable (Long term) $329,400 $1,036,800 $129,600 Cotal Long-term debt Total liabilities Stockholder's equity Capital Stock Preferred stock,(70,000 shares) Common stock, (108,000 shares * $10 per share) Total capital stock Retained Earnings S1,166,400 $1.495,800 $486,000 $1,080,000 $1,566,000 $313,200 Other comprehensive income Total stockholder's equity Total liabilities and stockholders' equity $32,400 $1,911,600 $3,407,400