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Arlene Joy S. Garcia BSA-4 Assignment 1 ACC 311 730-930 AM: Required

The document summarizes the statement of financial position of Wakanda Company as of December 31, 2019. It provides details of the company's current assets of $534,000, non-current assets of $2,545,000, total liabilities of $1,309,000 and total shareholder's equity of $1,170,000. It also includes notes that reconstruct balances and provide supporting details and computations for items in the statement of financial position.

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ARLENE GARCIA
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154 views3 pages

Arlene Joy S. Garcia BSA-4 Assignment 1 ACC 311 730-930 AM: Required

The document summarizes the statement of financial position of Wakanda Company as of December 31, 2019. It provides details of the company's current assets of $534,000, non-current assets of $2,545,000, total liabilities of $1,309,000 and total shareholder's equity of $1,170,000. It also includes notes that reconstruct balances and provide supporting details and computations for items in the statement of financial position.

Uploaded by

ARLENE GARCIA
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Arlene Joy S.

Garcia BSA-4
Assignment 1 ACC 311 730-930 AM

Presented below is the statement of financial position of Wakanda Company on


December 31, 2019.

Current assets P 435,000


Investments 640,000
Property, plant and equipment 1,720,000
Intangible assets 305,000
Current liabilities 330,000
Long-term liabilities 1,000,000
Shareholders’ equity 1,770,000

 The current assets include cash of P100,000; accounts receivable of P170,000 less
P10,000 for allowance for doubtful accounts; inventories amounting to P180,000; and
unearned revenue of P5,000. The cash balance is composed of P114,000 less a bank
overdraft of P14,000.
 The investments include cash surrender value of a life insurance contract amounting to
P40,000; investment in shares (short-term-trading) of P80,000; and long-term (available for
sale) of P270,000; and bond sinking fund of P250,000.
 Property, plant and equipment include buildings amounting to P1,040,000 less accumulated
depreciation P360,000; equipment amounting to P450,000 less accumulated depreciation
P180,000; land amounting to P500,000; and land held for undetermined use amounting to
P270,000.
 Intangible assets include a franchise of P165,000; goodwill of P100,000; and discount on
bonds payable of P40,000.
 Current liabilities include accounts payable of P90,000; notes payable (short-term) of
P80,000; and long-term liabilities amounting to P120,000; and taxes payable of P40,000.
 Long-term liabilities comprise solely of 10% bonds payable due on year 2026.
 Shareholders’ equity has preference shares, no par, authorized 200,000 shares, issued
70,000 shares for P450,000, and ordinary shares P1 par, authorized 400,000 shares, issued
100,000 shares at an average price of P10. In addition, the entity has retained earnings of
P320,000.

Required:
Reconstruct the balances in the Statement of Financial Position of Wakanda Company
for December 31, 2019 (i.e. determine the correct balances for the items presented).
Show supporting computations for the adjusted balances.
Answer:

Wakanda Company
Statement of Financial Position
As of December 31, 2019
Notes
Assets
Current Assets
Cash P 114,000
Trade and other receivables 160,000
Inventories 180,000
Short-term investments 80,000
Total current assets 534,000

Non-current assets
Property, plant & equipment 1,450,000
Investment property 270,000
Long-term investments 560,000
Intangible assets 265,000
Total non-current assets 2,545,000
TOTAL ASSETS P 3,079,000

LIABILITIES AND SHAREHOLDER’S EQUITY


Current liabilities
Trade and other payables 229,000
Non-current liabilities
Long-term liabilities 1,080,000
TOTAL LIABILITIES 1,309,000

SHAREHOLDER’S EQUITY
Preference shares, no par, authorized 200,000 shares,
70,000 shares issued 450,000
Ordinary shares, P1 par, authorized 400,000 shares,
100,000 shares issued 100,000
Share premium 900,000
Retained earnings 320,000
Total shareholder’s equity 1,170,000
TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY P 3,079,000

NOTES TO FINANCIAL STATEMENTS


Note 1: Trade and other receivables
Accounts receivable P 170,000
Allowance for doubtful accounts (10,000)
Total P 160,000

Note 2: Property, plant and equipment


Land P 500,000
Buildings 1,040,000
Accumulated depreciation-Bldg. (360,000)
Equipment 450,000
Accumulated depreciation-equipment (180,000)
Total P1,450,000

Note 3: Long-term investments


Cash surrender value of life insurance P 40,000
Long-term investments available for sale 270,000
Bond sinking fund 250,000
Total P 560,000

Note 4: Intangible assets


Franchise P 165,000
Goodwill 100,000
Total P 265,000

Note 5: Trade and other payables


Accounts payable P 90,000
Notes payable 80,000
Bank overdraft 14,000
Unearned revenue 5,000
Taxes payable 40,000
Total P 229,000

Note 6: Long-term liabilities


Bonds payable P 120,000
Discount on bonds payable (40,000)
Other long-term liabilities 1,000,000
Total P 1,080,000

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