3 LEARNING CHECK

1. What are financial statements?

2. What are the components of financial statements?

3. Explain the objective of financial statements.

4. Define a statement of financial position.

5. What are the classification of assets? Define each.

6. What are the essential characteristics of a liability?

7. What are the classification of liabilities? Define each.

8. What are the elements comprising the equity of a corporation?

9. What is the meaning of "notes to financial statements"?

10. Explain the two forms of statement of financial position.

 3 STATEMENT OF FINANCIAL POSITION
Technical Knowledge

• To identify the components of financial statements.

• To understand the objective of financial statements.
• To understand the objective and use of a statement of financial position.
• To understand the current and noncurrent classification of assets and liabilities.
• To know the components of equity in a corporate type of business.
• To know the forms of presenting the statement of financial position.

A. Definition of Financial Statement

Financial statements are the means by which the information accumulated and processed in financial
accounting is periodically communicated to the users.

The financial statements are the end product or main output of the financial accounting process

General purpose financial statements or simply referred to as financial statements are those intended
to meet the needs of users who are not in a position to require and entity to prepare reports
tailored to their particular information needs.

In other words, general purpose financial statements are directed to all common users and not to
specific users.

B. Components of Financial Statements

A complete set of financial statements comprises the following components:

1. Statement of financial position

2. Income statement
3. Statement of comprehensive income
4. Statement of changes in equity
5. Statement of cash flows
6. Notes comprising a summary of significant accounting policies and other explanatory notes

C. Objective of Financial Statement

The objective of financial statements is to provide information about the financial position, financial
performance and cash flows of an entity that is useful to a wide range of users in making economic
decisions.

To meet this objective, financial statements provide information about the following:

a. Asset d. Income and expenses

b. Liabilities e. Contribution by and distribution to owners in their capacity as owners
c. Equity f. Cash flows

D. Statement of Financial Position

A statement of financial position is a formal statement showing the three elements comprising financial
position: assets, liabilities, and equity

d1. Assets
An asset is defined as resource controlled by the entity as a result of past events and from which
future economic benefits are expected to flow to the entity.

The essential characteristics of an asset are:

a. The asset is controlled by the entity.

b. The asset is the result of past transaction or event.
c. The asset provided future economic benefits.
d. The cost of the asset can be measured reliably.

d1a. Classification of assets

Assets are classified into two : current assets and noncurrent assets
dd1. Current assets

An entity shall classify an asset as current when:

a. The asset is cash or cash equivalent unless the asset is restricted from being exchanged
or used to settle a liability for at least twelve months after the reporting period.
b. The entity holds the asset primarily for the purpose of trading.
c. The entity expects to realized the asset within twelve months after the reporting period.
d. The entity expects to realized the asset or intends to sell or consume it within the entity's
normal operating cycle.
Example : a. Cash and cash equivalent
b. Financial assets at fair value such as trading securities and other
investments
c. Trade and other receivables
d. Inventories
e. Prepaid expenses

dd2. Noncurrent assets

Example: a. Property, plant and equipment
b. Long-term investment
c. Intangible assets
d. Deferred tax assets
e. Other noncurrent assets

Property, plant and equipment are tangible assets which are held by an entity for use in
production or supply of goods or services, for rental to others, or for administrative purposes
and are expected to be used during more than one period.

Examples: Land, building, machinery, equipment, furniture and fixtures, patterns, mold,
dies, tools

Most plant, property and equipment, except land, are presented at cost less accumulated
depreciation.

Long-term investments are assets held by an entity for the accretion of wealth through
capital distribution, such as interest, royalties, dividends and rentals, for capital appreciation or
for other benefits to the investing entity such as those obtained through trading relationship.
 Intangible assets is simply defined ad an identifiable nonmonetary asset without physical
substance.

Examples : Identifiable intangible assets

Patent, franchise, copyright, lease right, trademark, computer software

Examples : Unidentifiable intangible assets

Goodwill

Other noncurrent assets are those assets that do not fit into the definition of the previously
mentioned noncurrent assets.

Examples : Long-term advances to officers, directors, shareholders and employees,

Abandoned property, long-term refundable deposit

d2. Liabilities

A liability is defined as present obligation of an entity arising from past events, the settlement of
which is expected to result in an outflow from the entity of resources embodying economic
benefit.

The essential characteristics of a liability are:

a. The liability is the present obligations of a particular entity.

b. The liability arises from past transaction or event.
c. The settlement of the liability requires the outflow of resources embodying economic benefits.

d2a. Current liabilities

Liabilities are current when:

a. The entity expects to settle the liability within the entity's normal operating cycle.
b. The entity holds the liability primarily for the purpose of trading.
c. The liability is due to be settled within twelve months after the reporting period.
d. The entity does not have an unconditional right to defer settlement of the liability for at
least twelve months after the reporting period.

Examples : a. Trade and other payables

b. Current provisions
c. Short-term borrowings
d. Current portion of long-term debt
e. Current tax liability

d2b. Noncurrent liabilities

Noncurrent liabilities is the residual definition, meaning that all liabilities not classified as
current are classified as noncurrent.

Examples : a. Noncurrent portion of long-term debt

b. Finance lease liability
c. Deferred tax liability
d. Long-term obligations to company officers
e. Long-term deferred revenue
d3. Equity

The term equity is the residual interest in the assets of the entity after deducting all of its liabilities.
Simply stated, equity means net asset or total asset minus total liabilities.

The terms used in reporting the equity of an entity depending on the form of business organization
are:
a. Owner's equity in a proprietorship.
b. Partners' equity in a partnership.
c. Shareholders' equity in a corporation.

d3a. Shareholders' equity

Shareholders' equity is the residual interest of owners in the net asset of a corporation
measured by the excess of assets over liabilities.

Generally, the elements constituting shareholders' equity are:

a. Share capital e. Share premium

b. Subscribed share capital f. Accumulated profit (loss)
c. Preference share capital g. Appropriation reserve
d. Ordinary share capital h. Revaluation reserve
i. Treasury share

d4. Notes to Financial Statements

Notes to financial statements provide narrative description or disaggregation of items presented in

the financial statements and information about items that do not qualify for recognition.

Notes contain information in addition to that presented in the statement of financial position,
income statement, statement of comprehensive income, statement of changes in equity and
statement of cash flows.

In other words, notes to financial statement are used to report information that does not fit into
the body of financial statements in order to enhance the understandability of the financial
statements..

The purpose of the notes to financial statements is "to provide the necessary disclosures
required.

d5. Forms of Statement of Financial Position

a. Report form
This form sets forth the three major sections in a downward sequence of asset, liabilities and
equity

b. Account form
The presentation follows of an account, meaning the assets are shown on the left side and
liabilities and equity on the right side of the statement of financial position

Report Form

SINGLE COMPANY
 Statement of Financial Position
December 31, 2017
(in USDollar)

ASSETS
Note
Current Assets:
Cash and cash equivalent (1) 500,000
Financial asset at fair value 200,000
Trade and other receivables (2) 700,000
Inventories (3) 900,000
Prepaid expenses (4) 50,000
Total current assets 2,350,000

Noncurrent Assets:
Plant, property and equipment (5) 5,000,000
Investment in associate, at equity 1,000,000
Long-term investments (6) 5,100,000
Intangible assets (7) 2,000,000
Other noncurrent assets (8) 100,000
Total noncurrent assets 13,200,000
TOTAL ASSETS 15,550,000

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
Trade and other payables (9) 750,000
Note payable-short-term debt 400,000
Current portion of bonds payable 200,000
Warranty liability 50,000
Total current liabilities 1,400,000

Noncurrent Liabilities:
Bonds payable-remaining portion 1,800,000
Note payable-due July 1, 2019 600,000
Deferred tax liability 100,000
Total noncurrent liabilities 2,500,000
TOTAL LIABILITIES 3,900,000

Shareholders' Equity
Share capital, $100 par 5,000,000
Reserves (10) 3,000,000
Retained earnings 3,650,000
Total SHAREHOLDERS' EQUITY 11,650,000
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 15,550,000

Note 1 - Cash and cash equivalents

Cash on hand 40,000

Cash in bank 300,000
Petty cash fund 10,000
RNS Treasury bill, purchased on December 1, 2017, due March 2, 2018 150,000
Total cash and cash equivalent 500,000
Note 2 - Trade and other receivables
Accounts receivable 580,000
Allowance for doubtful accounts (20,000)
Notes receivable 100,000
Accrued interest on notes receivable 10,000
Advances to employees, collectible currently 30,000
Total trade and other receivables 700,000

Note 3 - Inventories
Finished goods 300,000
Goods in process 400,000
Raw materials 150,000
Manufacturing supplies 50,000
Total inventories 900,000

Note 4 - Prepaid expenses

Office supplies unused 30,000

Prepaid insurance 20,000
Total prepaid expenses 50,000

Note 5 - Property, plant and equipment

Land 1,500,000
Building 4,500,000
Machinery and equipment 1,000,000
Furniture and fixtures 300,000
Patterns, molds, dies and tools, (net) 100,000
Total 7,400,000
Accumulated depreciation (2,400,000)
Carrying amount 5,000,000

Accumulated depreciation:
Building 1,900,000
Machinery and equipment 350,000
Furniture and fixtures 150,000
Total accumulated depreciation 2,400,000

Note 6 - Long-term investments

Plant expansion fund 2,000,000
Investment in bonds 3,000,000
Cash surrender value 100,000
Total long-term investments 5,100,000

Note 7 - Intangible assets

Patent 500,000
Franchise 1,500,000
Total intangible assets 2,000,000

Note 8 - Other noncurrent assets

Long-term refundable deposit 20,000
 Long-term advances to officers 80,000
Total other noncurrent assets 100,000

Note 9 - Trade and other payables

Accounts payable 350,000

Notes payable 150,000
Accrued interest on note payable 15,000
Income tax payable 50,000
Dividends payable 100,000
Accrued expenses 85,000
Total trade and other payables 750,000

Note 10 - Reserves
Share premium 2,000,000
Retained earnings appropriated for contingencies 1,000,000
Total reserves 3,000,000

Account Form

SINGLE COMPANY
Statement of Financial Position
December 31, 2017
(in USDollar)

ASSETS LIABILITIES AND SHAREHOLDERS' E

Current Assets: Current Liabilities:

Cash and cash equivalent (1) 500,000 Trade and other payab
Financial asset at fair value 200,000 Note payable-short-term
Trade and other receivables (2) 700,000 Current portion of bond
Inventories (3) 900,000 Warranty liability
Prepaid expenses (4) 50,000 Total current liabilities
Total current assets 2,350,000
Noncurrent Liabilities:
Noncurrent Assets: Bonds payable-remaini
Plant, property and equipment (5) 5,000,000 Note payable-due July
Investment in associate, at equity 1,000,000 Deferred tax liability
Long-term investments (6) 5,100,000 Total noncurrent liabi
Intangible assets (7) 2,000,000 TOTAL LIABILITIES
Other noncurrent assets (8) 100,000
Other noncurrent assets 13,200,000 Shareholders' Equity
Share capital, $100 par
Reserves
Retained earnings
Total Shareholders' Eq

TOTAL LIABILITIES AND SHAREHOL

TOTAL ASSETS 15,550,000 EQUITY
lties, dividends and rentals, for capital appreciation or
 SINGLE COMPANY
Statement of Financial Position
December 31, 2017
(in USDollar)

LIABILITIES AND SHAREHOLDERS' EQUITY

Trade and other payables (9) 750,000

Note payable-short-term debt 400,000
Current portion of bonds payable 200,000
50,000
Total current liabilities 1,400,000

Bonds payable-remaining portion 1,800,000

Note payable-due July 1, 2019 600,000
Deferred tax liability 100,000
Total noncurrent liabilities 2,500,000
TOTAL LIABILITIES 3,900,000

Share capital, $100 par 5,000,000

(10) 3,000,000
Retained earnings 3,650,000
Total Shareholders' Equity 11,650,000

TOTAL LIABILITIES AND SHAREHOLDERS'

15,550,000
 3 problems
Problem 3-1

The following account balances are available from the records of Simple Company
at December 31, 2017:

Share capital $ 5,000,000

Share premium 500,000
Retained earnings 880,000
Serial bonds payable ($500,000 due every July 1 of each year) 2,500,000
Employees income tax payable 20,000
Note payable 100,000
Accrued expenses payable 30,000
Accrued interest on note payable 10,000
Income tax payable 60,000
Advances from customers 100,000
Allowance for doubtful accounts (50,000)
Accounts receivable 500,000
Accumulated depreciation-building (1,600,000)
Accumulated depreciation-machinery (1,300,000)
Investment in bonds 1,500,000
Land 1,500,000
Machinery 2,000,000
Factory supplies 50,000
Notes receivable 150,000
Building 4,000,000
Cash 420,000
Claim receivable 20,000
Finished goods 400,000
Franchise 200,000
Goods in process 600,000
Prepaid insurance 20,000
Raw materials 200,000
Trading securities 250,000
Tools 40,000
Goodwill 100,000
Plant expansion fund 500,000
Accounts payable 300,000

Required:
Prepare a properly classified statement of financial position on December 31, 2017.

Problem 3-2
Summer Company provided the following account balances on December 31, 2017:

Accounts receivable $ 400,000

Advances to officers-not currently collectible 100,000
Sinking fund 400,000
Building 5,000,000
Long-term refundable deposit 50,000
Cash and cash equivalents 500,000
Cash surrender value 60,000
Equipment 1,000,000
Lease rights 100,000
Accrued interest on notes receivable 10,000
Inventories 1,300,000
Land 1,500,000
Land held for speculation 500,000
Notes receivable 250,000
Computer software 3,250,000
Prepaid expenses 70,000
Trading securities 280,000
Unearned rent income 40,000
Retained earnings (deficit) (1,800,000)
Share premium-preference 500,000
Premium on bonds payable 1,000,000
Preference share capital 2,000,000
Share premium-ordinary 200,000
Notes payable 300,000
Withholding tax payable 10,000
Accounts payable 400,000
Accrued salaries payable 100,000
Accumulated depreciation-building 2,000,000
Accumulated depreciation-equipment 200,000
Allowance for doubtful accounts 20,000
Bonds payable 5,000,000
Dividend payable 120,000
Ordinary share capital 5,000,000
Accrued salaries payable 30,000
Preference share redemption fund 350,000

Required:
Prepare a properly classified statement of financial position on December 31, 2017.
Problem 3-3 Multiple Choice
1. Which of the following is a current asset?

a. Cash surrender value of a life insurance policy of which the company is the
beneficiary.
b. Investment in marketable securities for the purpose of controlling the issuing
company.
c. Cash designated for the purchase of tangible fixed assets.
d. Trade installments receivable normally collectible in 18 months.

2. Working capital is

a. The group of assets which enables the business to operate profitably.

b. Capital which has been reinvested in the business.
c. Unappropriated retained earnings.
d. Current assets less current liabilities.

3. The basis for classifying assets as current or noncurrent is the period of time
normally elapsed from the time the accounting entity expends cash to the time it
converts

a. Inventory back into cash, or 12 months, whichever is shorter.

b. Receivables back into cash, or 12 months whichever is longer.
c. Tangible fixed assets back into cash, or 12 months, whichever is longer.
d. Inventory back into cash, or 12 months, whichever is longer.

4. The distinction between current and noncurrent assets and liabilities is now based
primarily on

a. One year; no exceptions.

b. One year or operating cycle whichever is shorter.
c. One year or operating cycle whichever is longer.
d. Operating cycle; no exceptions.

5. A deficit is synonymous with

a. A net loss for the current period.

b. A cash overdraft at the bank.
c. Negative working capital at the end of the period.
d. A debit balance in retained earnings at the end of the period.

6. Which of the following items should never be included in the current sections of
 the statement of financial position?

a. Premium paid over the face amount of bond investment.

b. Receivable from customer not collectible for over one year.
c. Deferred income taxes resulting from interperiod income tax allocation
d. Funded serial bonds.

7. As generally used, the term "net assets" represents

a. Retained earnings of a corporation.

b. Current assets less current liabilities.
c. Total paid-in capital of a corporation.
d. Total assets less total liabilities.

8. The operating cycle of a business is that span of time which

a. Coincides with the economy's business cycle which runs from one of the
economy's business activity to the next.
b. Corresponds with its natural business year which runs from one of the
particular firm's business activity to the next.
c. Is set by the industry's trade association usually on an average length of time
of all firms which are members of the association.
d. Runs from cash disbursement for items of inventory through their sale to the
realization of cash from sale.

9. For accounting purposes the term "current assets" is used to designate cash and
and other assets or resources commonly identified as:

a. Those which can be liquidated in the normal course of business during the
following fiscal year.
b. Those which will realized in cash or sold or consumed during the normal
operating cycle of the business.
c. Those which are reasonably expected to be realized in cash or sold or
consumed during the normal operating cycle of the business.
d. those which can be used for the payment of current liabilities or consumed
during the normal operating cycle of the business.

10. Which of the following items is current liability?

a. Bonds (for which there is an adequate sinking fund classified as long-term

investment).
b. Bonds due in five years.
c. Bonds due in eleven months.
d. Bonds to be refunded when due in eight months, there being no doubt about
the marketability of the refunding issue.
Problem 3-4
Following where taken from the books and records of Sussex Company as of December
31, 2017:

Dividends in arrears on preferred shares $ 20,000

Employees income tax withheld 3,000
Bonds payable, issued in current year and maturing in five annual
installments commencing April 1, 2018 200,000
Income tax payable 27,000
Contested tax assessment under litigation 50,000
Deferred income tax payable 8,000
Debtor's accounts with debit balance 5,000
Customers' accounts with credit balance 10,000
Cash overdraft 15,000

Required:
What is the amount of current liabilities on December 31, 2017?

Problem 3-5
The following data were provided by Adele Company:

Cash, including NSF customer's check of $3,000 $ 48,000

Accounts receivable, including the sales price of $6,000 of goods
consigned out at a profit of 140% on cost, still unsold by consignee 96,000
Inventory, including goods in transit purchased FOB shipping point,
$2,000 62,000
Prepaid expenses 1,500

Required:
What is the total current assets considering the data above for Adele Company?

Problem 3-6
The December 31, 2017 trial balance of Triple Company among others, includes the following:

Notes receivable, which have been reduced by notes discounted of

$10,000 that are not yet due and on which the company is
contingently liable $ 50,000

Accounts receivable, which include accounts with credit balances

of $5,000 and past due accounts of $3,000 on which a loss of
 80% is anticipated 100,000

Merchandise inventory, which includes goods held on consignment,

$4,000 and goods received on December 31, $6,000. Neither
of these items have been recorded as a purchase 90,000

Rent received in advance 8,000

Notes payable, which are trade notes with the exception of $20,000
note payable to bank on June 30, 2018 60,000
Accounts payable, which include accounts with debit balance of $1,000 40,000

Mortgage notes, which are payable in annual installments of $5,000

on February 1 of each year 30,000

Required:
What is the amount of current liabilities on December 31, 2017?

Problem 3-7
The statement of financial position of Cindy Company on December 31, 2017 contained
the following data:

Cash, including sinking fund of $50,000 with trustee $ 150,000

Accounts receivable 300,000
Inventory, including $20,000 cost of goods in transit purchased
FOB point of destination. The goods are received Jan. 5, 2018 200,000
$ 650,000

The balance of accounts receivable disclosed the following:

Trade accounts $ 250,000

Advances to employees 10,000
Equity in $125,000 of accounts receivable assigned 5,000
Sales price of goods invoiced to customers at 40% profit on sales
on December 26, 2017 but delivered on January 3, 2018, and
not included in reported inventory 35,000
$ 300,000
Required:
What is the correct amount of current assets on December 31, 2017?

Problem 3-8
The following data were taken from the December 31, 2017 trial balance of Amex Company:

Retained earnings-free $ 200,000

 Reserve for pending lawsuit 100,000
Reserve for depreciation 60,000
Reserve for warranties 20,000
Donated capital 10,000
Treasury shares, cost 40,000
Excess over par 75,000
Share capital-authorized 500,000
Share capita-unissued 125,000
Share dividend distributable 50,000

Required:
Based on the foregoing, prepare shareholders' equity section on statement of financial
position as of December 31, 2017.

Problem 3-9
The following information pertains to Island company on December 31, 2017:

Overdraft with First Bank $ 5,000

Accounts payable 150,000
Dividends in arrears-Preference share 20,000
Share dividend payable 45,000
Accrued expenses 10,000
Mortgage payable-due December 31, 2022 100,000
Customers' deposits 15,000
Reserve for contingencies 25,000
Total liabilities $ 370,000

Required:
What is the correct amount of liabilities for accounting purposes on December 31, 2017?
 Simple Company
Statement of Financial Position December 31, 2017

ASSETS
Current assets:
Allowance for doubtful accounts
Accounts receivable
Factory supplies
Notes receivable
Cash
Claim receivable
Finished goods
Goods in process
Prepaid insurance
Raw materials
Trading securities
Total of Currrent assets

Noncurrent assets:
Accumulated depreciation-building
Accumulated depreciation-machinery
Investment in bonds
Land
Machinery
Building
Franchise
Tools
Goodwill
Plant expansion fund
Total Noncurrent assets
Total Assets
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
Note payable
Employees income tax payable
Income tax payable
Accrued expenses payable
Accrued interest on note payable
Advances from customers
total of current liabilities
Noncurrent liabilities:
Serial bonds payable ($500,000 due every July 1 of each year)

Total of Noncurrent liabilities

Total of Liabilities:

Shareholders' Equity
Retained earnings
Share capital
Share premium
Total of Equity
Total of Liabilities and equity

Summer Company
Statement of financial position
December 31, 2017
ASSETS
Current assets:
Accounts receivable
Cash and cash equivalents
Accrued interest on notes receivable
Inventories
Notes receivable
Prepaid expenses
Trading securities
Allowance for doubtful accounts
total of current asssets
Noncurrent assets:
Advances to officers-not currently collectible
Sinking fund
Building
Long-term refundable deposit
Cash surrender value
Equipment
Lease rights
Computer software
Land
Land held for speculation
Accumulated depreciation-building
Accumulated depreciation-equipment
Preference share redemption fund
Total of noncurrent assets
Total of assets

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Unearned rent income
Notes payable
Withholding tax payable
Accounts payable
Accrued salaries payable
Dividend payable
Accrued salaries payable
Total of Current liabilities

Noncurrent liabilities:
Bonds payable
Premium on bonds payable
Total of Noncurrent liabilities
Total of liabilities

Shareholders' Equity
Retained earnings (deficit)
Share premium-preference
Preference share capital
Share premium-ordinary
Ordinary share capital
Total of equity
Total of Liabilities and equity
current liabilities
Employees income tax withheld
Income tax payable
Customers' accounts with credit balance
Cash overdraft

Adele Company
Balance sheet December 31, 2017
Current assests
Cash 48,000
Account receivable 96,000
Inventory 62,000
Prepaid expenses 1,500
Total: 207,500
 Amex Company
December 31, 2017 trial balance
Retained earnings-free
Reserve for pending lawsuit
Reserve for depreciation
Reserve for warranties
Donated capital
Excess over par
Share capital-authorized
Share capita-unissued
Share dividend distributable
Treasury shares, cost
Total shareholders' equity:
17

(50,000)
500,000
50,000
150,000
420,000
20,000
400,000
600,000
20,000
200,000
250,000
2,560,000

(1,600,000) Note 5 - Property, plant and equipment

(1,300,000) Land
1,500,000 Machinery
1,500,000 Building
2,000,000 Accumulated depreciation-building
4,000,000 Accumulated depreciation-machinery
200,000 Tools
40,000
100,000 Note 6 - Long-term investments
500,000 Investment in bonds
6,940,000 Plant expansion fund
9,500,000 Note 7 - Intangible assets
UITY Goodwill
Franchise
300,000
100,000 Accounts payable
20,000 Note payable
60,000 Employees income tax payable
30,000 Income tax payable
10,000 Accrued expenses payable
100,000 Accrued interest on note payable
620,000
 Advances from customers
2,500,000

2,500,000
3,120,000

880,000
5,000,000
500,000
6,380,000
9,500,000

ny
position
, 2017
CURRENT ASSET
Cash and cash equivalents
$ 400,000 Note 2 - Trade and other receivables
500,000 Accounts receivable
10,000 Accrued interest on notes receivable
1,300,000 Notes receivable
250,000 Trading securities
70,000 Allowance for doubtful accounts
280,000 $ 2,790,000
(20,000) Inventories
$ 2,790,000 Prepaid expenses
NONCURRENT ASETS
100,000 Note 8 - Other noncurrent assets
400,000 Advances to officers-not currently collectible
5,000,000 Long-term refundable deposit
50,000
60,000
1,000,000 Note 6 - Long-term investments
100,000 Sinking fund
3,250,000 Cash surrender value
1,500,000 Preference share redemption fund
500,000
(2,000,000) Note 5 - Property, plant and equipment
(200,000) 10,110,000 Building
350,000 $ 12,900,000 Equipment
10,110,000 Land
 Land held for speculation

OLDERS' EQUITY Accumulated depreciation-building

Accumulated depreciation-equipment
40,000
300,000 Note 7 - Intangible assets
10,000 Lease rights
400,000 Computer software
100,000
120,000 1,000,000 CUREENT LIABIITIES
30,000 Note 9 - Trade and other payables
Notes payable
Withholding tax payable
Accounts payable
5,000,000 6,000,000 Accrued salaries payable
1,000,000 7,000,000 Dividend payable
Accrued salaries payable

(1,800,000)
500,000
2,000,000
200,000 5,900,000
5,000,000 12,900,000
 3,000
27,000
10,000
15,000
55,000
$ 200,000
100,000
(60,000)
20,000
10,000
75,000
500,000
(125,000)
(50,000)
(40,000)
$ 630,000
Cash and cash equivalent
Cash

Prepaid expenses
Factory supplies
Prepaid insurance

Inventories
Finished goods
Goods in process
Raw materials

Trade and other receivables

Allowance for doubtful accounts
Accounts receivable
Notes receivable
Claim receivable
Trading securities

1,500,000
2,000,000
4,000,000
(1,600,000)
(1,300,000)
40,000
4,640,000 4,640,000
2,000,000
1,500,000 300,000
500,000 6,940,000
2,000,000
100,000
200,000
300,000
300,000
100,000
20,000
60,000
30,000
10,000
520,000
 100,000 620,000
100,000

500,000
receivables
$ 400,000
10,000
250,000 $ 2,790,000
280,000
(20,000)
$ 920,000
1,300,000
70,000

$ 12,900,000
ently collectible 100,000
50,000
150,000

400,000
60,000
350,000 10,110,000
810,000
and equipment
5,000,000
1,000,000
1,500,000
 500,000

(2,000,000)
(200,000)
5,800,000

100,000
3,250,000
3,350,000

payables
300,000
10,000
400,000
100,000
120,000
30,000
960,000
420,000

50,000
20,000
70,000

400,000
600,000
200,000
1,200,000

(50,000)
500,000
150,000
20,000
250,000
870,000

2,560,000

9,500,000