Name: Picarra, Sherilyn B.

CFAS/FAR
Yr. & Sec.: CBET 01-201P Prof. Felicitas C. Tuazon

Required: Prepare a statement of financial position, presented and classified

according to generally accepted accounting principles with appropriate notes.

PROBLEM 8-4 (IAA)

Summa Company
Statement of Financial Position
December 31, 2020

A SS E TS

Current assets: Note

Cash (1) 700,000
Bond sinking fund 2,000,000
Trade and other receivables (2) 830,000
Inventory 1,200,000
Prepaid expenses 100,000
Total current assets 4,830,000

Noncurrent assets:
Property, plant and equipment (3) 5,500,000
Investment property 700,000
Intangible asset (4) 370,000
Total noncurrent assets 6,570,000
Total assets 11,400,000

LIABILITIES AND EQUITY

Note
Current liabilities:
Trade and other payables (5) 2,050,000
Bonds payable due June 30, 2009 2,000,000
Total current liabilities 4,050,000
Noncurrent liability:
Deferred tax liability 650,000
Equity:
Share capital (6) 3,500,000
Reserves (7) 500,000
Retained earnings 2,700,000
Total equity 6,700,000
Total liabilities and equity 11,400,000

Note 1 - Cash

Cash on hand 50,000

Cash in bank 650,000
Total 700,000
Note 2 - Trade and other receivables

Accounts receivable 650,000

Allowance for doubtful accounts ( 50,000)
Notes receivable 200,000
Accrued interest receivable 30,000
Total 830,000

Note 3 - Property, plant and equipment

Accum. Book
Cost depr. value
Land 1,000,000 - 1,000,000
Building 5,500,000 2,500,000 3,000,000
Furniture and equipment 2,400,000 900,000 1,500,000
Total 8,900,000 3,400,000 5,500,000

Note 4 - Intangible asset

Patent 370,000

Note 5 - Trade and other payables

Accounts payable 1,000,000

Notes payable 850,000
Accrued taxes 50,000
Other accrued liabilities 150,000
Total 2,050,000

Note 6 – Share capital

Authorized share capital, 50,000 shares, P100 par 5,000,000

Unissued share capital (2,000,000)
Issued share capital 3,000,000
Subscribed share capital, 10,000 shares 1,000,000
Subscription receivable ( 500,000)
Paid in capital 3,500,000

Note 7 - Reserves

Share premium 300,000

Retained earnings appropriated for contingencies 200,000
Total 500,000