Chapte 1

1. A
1-1
2. D
1. D 1-3 3. B
2. A
1. D 4. B
3. A
2. D 5. B
4. D
3. D 6. C
5. B
4. D 7. C
1-2 5. A 8. D
6. A
1. D
1-6
2. C 7. D
1. C
3. B 8. A
2. A
4. A 9. D
3. B
5. B 10. B
4. D
1-4
1-7
1. C
1. C
2. C
2. B
3. C
3. A
4. C
4. B
5. D
5. C
1-5
 Statement of Financial Position
December 31, 2020
ASSETS

Current assets:
Cash 800,000
Financial asset at fair value 440,000
Account Receivable 750, 000
Allowance for Doubtful Account (50,000) 700,000
Inventory 1,000,000
Prepaid Expense 160,000
Total 3,100,000

Non-Current Assets:
Land 500,000
Building in Process 5,000,000
Machinery and Equipment 1,500,000
Accumulated Depreciation (300,000) 1,200,000
Patent 200,000
Total 6,900,000

Total Assets 10,000,000

Liability and Equity

Current Liability:
Account Payable 900,000
Accrued Expense 150,000
Accrued Interest for Bond Payable
(2M x 10% x 3/12) 50,000
Liability for Law Suit 100,000
Total: 1,200,000

Non-Current Liability:
Bonds Payable 2,000,000
Discount Bond Payable (200,000) 1,800,000
Note Payable, July 2022 250,000
Total 2,050,000

Equity:
Share Capital 3,000,000
Retained Earnings 4,000,000
Treasury stock, 2000 shares (250,000)
Total 6,750,000
Total Liability and Equity 10,000,000