21. Receivables—Officers (due in 1 year).

22. Finished Goods.

23. Accounts Receivable.
24. Bonds Payable (due in 4 years).
Instructions

Prepare a classified statement of financial position in good form. (No

monetary amounts are necessary.)
E5.5 (LO1, 2) (Preparation of a Corrected Statement of Financial
Position) Bruno SpA has decided to expand its operations. The
bookkeeper recently completed the following statement of financial
position in order to obtain additional funds for expansion.

Bruno SpA
Statement of Financials Positions
Decembers 31, 2019
Current assets
cash €260,000
Accounts receivable (net) 340,000
Inventory (at lower-of-average-cost-or-net realizable value) 401,000
Trading securities—at cost (fair value €120,000) 140,000
Property, plant, and equipment
Buildings (net) 570,000
Equipment (net) 160,000
Land held for future use 175,000
Intangible assets
Goodwill 80,000
Other identifiable assets 90,000
Prepaid expenses 12,000
Current liabilities
Accounts payable 135,000
Notes payable (due next year) 125,000
 Pension liability 82,000
Rent payable 49,000
Premium on bonds payable 53,000
Non-current liabilities
Bonds payable 500,000
Equity
Share capital—ordinary, €1.00 par, authorized 400,000 290,000
shares, issued 290,000
Share premium—ordinary 180,000
Retained earnings ?
Instructions

Prepare a revised statement of financial position given the available

information. Assume that the accumulated depreciation balance for the
buildings is €160,000 and for the equipment, €105,000. The allowance for
doubtful accounts has a balance of €17,000. The pension liability is
considered a non-current liability.
E5.6 (LO1, 2) (Corrections of a Statement of Financial Position) The
bookkeeper for Liba Ltd. has prepared the following statement of
financial position as of July 31, 2019 (amounts in thousands).

Liba Ltd.
Statement of Financial Position
As of July 31, 2019
Equipment (net) ¥ 84,000 Equity ¥155,500
Patents 21,000 Non-current liabilities 75,000
Inventory 60,000 Notes and accounts 44,000
payable
Accounts receivable 40,500 ¥274,500
(net)
Cash 69,000
¥274,500

The following additional information is provided.

current liability. If a liability is not reported, explain why.
E5.11 (LO1, 2) (Statement of Financial Position Preparation)
Presented below is the adjusted trial balance of Abbey Corporation at
December 31, 2019.
Debit Credit
Cash £ ?
Supplies 1,200
Prepaid Insurance 1,000
Equipment 48,000
Accumulated Depreciation—Equipment £ 9,000
Trademarks 950
Accounts Payable 10,000
Salaries and Wages Payable 500
Unearned Service Revenue 2,000
Bonds Payable (due 2022) 9,000
Share Capital—Ordinary 10,000
Retained Earnings 20,000
Service Revenue 10,000
Salaries and Wages Expense 9,000
Insurance Expense 1,400
Rent Expense 1,200
Interest Expense 900
Total £ ? £ ?
Additional information:
1. Net loss for the year was £2,500.
2. No dividends were declared during 2019.
Instructions

Prepare a classified statement of financial position as of December 31,

2019.
E5.12 (LO1, 2) (Preparation of a Statement of Financial Position)
Presented below is the trial balance of Vivaldi SpA at December 31,
2019.

Debit Credit
Cash € 197,000
Sales Revenue € 7,900,000
Trading Securities (at cost, €145,000) 153,000
Cost of Goods Sold 4,800,000
Long-term Investments in Bonds 299,000
Long-term Investments in Shares 277,000
Notes Payable (short-term) 90,000
Accounts Payable 455,000
Selling Expenses 2,000,000
Investment Revenue 63,000
Land 260,000
Buildings 1,040,000
Dividends Payable 136,000
Accrued Liabilities 96,000
Accounts Receivable 435,000
Accumulated Depreciation—Buildings 352,000
Allowance for Doubtful Accounts 25,000
Administrative Expenses 900,000
Interest Expense 211,000
Inventory 597,000
Pension Liability (long-term) 80,000
Notes Payable (long-term) 900,000
Equipment 600,000
Bonds Payable 1,000,000
Accumulated Depreciation—Equipment 60,000
Franchises 160,000
Share Capital—Ordinary (€5 par) 1,000,000
Treasury Shares 191,000
Patents 195,000
 Retained Earnings 78,000
Accumulated Other Comprehensive Income 80,000
Total €12,315,000 €12,315,000
Instructions

Prepare a statement of financial position at December 31, 2019, for

Vivaldi SpA. (Ignore income taxes.)
E5.13 (LO3) (Statement of Cash Flows—Classifications) The major
classifications of activities reported in the statement of cash flows are
operating, investing, and financing. Classify each of the transactions
listed below as:
1. Operating activity—add to net income.
2. Operating activity—deduct from net income.
3. Investing activity.
4. Financing activity.
5. Reported as significant non-cash activity in the notes to the
financial statements.
The transactions are as follows.
a. Issuance of ordinary shares.
b. Purchase of land and building.
c. Redemption of bonds.
d. Sale of equipment.
e. Depreciation of machinery.
f. Amortization of patent.
g. Issuance of bonds for plant assets.
h. Payment of cash dividends.
i. Exchange of furniture for office equipment.
j. Purchase of treasury shares.
k. Loss on sale of equipment.
l. Increase in accounts receivable during the year.
m. Decrease in accounts payable during the year.
Prepare a classified statement of financial position in good form. (No
monetary amounts are to be shown.)
P5.2 (LO1, 2) (Statement of Financial Position Preparation) Presented
below are a number of statement of financial position items for Montoya SA,
for the current year, 2019.
Goodwill € 125,000
Payroll taxes payable 177,591
Bonds payable 285,000
Cash 360,000
Land 480,000
Notes receivable 445,700
Notes payable (to banks) 265,000
Accounts payable 490,000
Retained earnings ?
Income taxes receivable 97,630
Unsecured notes payable (long-term) 1,600,000
Accumulated depreciation—equipment € 292,000
Inventory 239,800
Rent payable (short-term) 45,000
Income taxes payable 98,362
Long-term rental obligations 480,000
Share capital—ordinary, €1 par value 200,000
Share capital—preference, €10 par value 150,000
Prepaid expenses 87,920
Equipment 1,470,000
Trading securities 121,000
Accumulated depreciation—buildings 270,200
Buildings 1,640,000
Instructions

Prepare a classified statement of financial position in good form. Share capital

—ordinary shares authorized was 400,000 shares, and share capital—
preference shares authorized was 20,000 shares. Assume that notes
receivable and notes payable are short-term, unless stated otherwise. Cost
and fair value of trading securities are the same.
P5.3 (LO1, 2) (Statement of Financial Position Adjustment and
Preparation) The adjusted trial balance of Asian-Pacific Ltd. and other
related information for the year 2019 are presented below (amounts in
thousands).

Asian-Pacific Ltd.
Adjusted Trial Balance
December 31, 2019

Debit Credit
Cash ¥ 41,000
Accounts Receivable 163,500
Allowance for Doubtful Accounts ¥ 8,700
Prepaid Insurance 5,900
Inventory 208,500
Long-term Investments 339,000
Land 85,000
Construction in Process 124,000
Patents 36,000
Equipment 400,000
Accumulated Depreciation—Equipment 240,000
Accounts Payable 148,000
Accrued Expenses 49,200
Notes Payable 94,000
Bonds Payable 180,000
Share Capital—Ordinary 500,000
Share Premium—Ordinary 45,000
Retained Earnings 138,000
¥1,402,900 ¥1,402,900
Additional information:
 1. The average-cost method of inventory value is used.
2. The cost and fair value of the long-term investments that consist of
ordinary shares and bonds is the same.
3. The amount of the Construction in Process account represents the
costs expended to date on a building in the process of construction.
(The company rents factory space at the present time.) The land on
which the building is being constructed cost ¥85,000, as shown in the
trial balance.
4. The patents were purchased by the company at a cost of ¥40,000 and
are being amortized on a straight-line basis.
5. The notes payable represent bank loans that are secured by long-term
investments carried at ¥120,000. These bank loans are due in 2020.
6. The bonds payable bear interest at 8% payable every December 31,
and are due January 1, 2030.
7. 600,000 ordinary shares with a par value of ¥1 were authorized, of
which 500,000 shares were issued and outstanding.
Instructions

Prepare a statement of financial position as of December 31, 2019, so that all

important information is fully disclosed.
P5.4 (LO1, 2) (Preparation of a Corrected Statement of Financial
Position) The statement of financial position of Kishwaukee Ltd. as of
December 31, 2019, is as follows.

Kishwaukee Ltd.
Statement of Financial Position
December 31, 2019

Assets
Goodwill (Note 1) £
120,000
Buildings 1,640,000
Inventory 312,100
Land 950,000
Accounts receivable 170,000
Treasury shares (50,000 shares) 87,000
Cash on hand 175,900
Assets allocated to trustee for plant expansion
Cash in bank 70,000
Treasury notes, at cost and fair value
138,000
£3,663,000
Equities
Notes payable (Note 2) £
600,000
Share capital—ordinary, authorized and issued, 1,000,000 1,150,000
shares, no par
Retained earnings 858,000
Non-controlling interest 570,000
Income taxes payable 75,000
Accumulated depreciation—buildings
410,000
£3,663,000
Note 1: Goodwill in the amount of £120,000 was recognized because the company believed that book
value was not an accurate representation of the fair value of the company. The gain of £120,000 was
credited to Retained Earnings.
Note 2: Notes payable are non-current except for the current installment due of £100,000.

Instructions

Prepare a corrected classified statement of financial position in good form.

The notes above are for information only.
P5.5 (LO1, 2) (Statement of Financial Position Adjustment and
Preparation) Presented below is the statement of financial position of
Sargent Corporation for the current year, 2019.

Sargent Corporation
Statement of Financial Position
December 31, 2019

Investments $ Equity $1,770,000