Problem 8-2

EXEMPLAR COMPANY
Statement of Financial Position
December 31, 2019

ASSETS

Note
Current assets:
Cash and cash equivalent 500,000
Trading securities 280,000
Trade and other receivables (1) 640,000
Inventories 1,300,000
Prepaid expenses 70,000
Total current assets 2,790,000

Noncurrent Assets:
Property, plant and equipment (2) 5,300,000
Long-term investments (3) 1,310,000
Intangible assets (4) 3,350,000
Other noncurrent assets (5) 150,000
Total noncurrent assets 10,110,000
Total assets 12,900,000

LIABILITIES AND SHAREHOLDER’S EQUITY

Current liabilities:
Trade and other Payables (6) 1,000,000

Noncurrent liabilities:
Bonds payable 5,000,000
Premium on Bonds Payable 1,000,000
Total noncurrent liabilities 6,000,000

Shareholder’s equity
Share capital (7) 7,000,000
Reserves (8) 700,000
Retained Earnings (deficit) (1,800,00)
Total Shareholder’s Equity 5,900,000
Total Liabilities and Shareholder’s Equity 12,900,000
Note 1- Trade and other receivables

Accounts Receivable 400,000

Allowance for doubtful accounts (20,000)
Notes Receivable 250,000
Accrued interest on notes receivable 10,000
Total trade and other receivables 640,000

Note 2-Property, Plant and Equipment

Land 1,500,000
Building 5,000,000
Equipment 1,000,000
Total 7,500,000
Accumulated Depreciation (2,200,000)
Carrying amount 5,300,000

Accumulated Depreciation:
Building 2,000,000
Equipment 200,000
Total accumulated depreciation 2,200,000

Note 3- Long-term investment

Land held for speculation 500,000

Sinking Fund 400,000
Preference share redemption fund 350,000
Cash surrender value 60,000
Total other long-term investments 1,310,000

Note 4- Intangible assets

Patent 100,000
Computer Software 3,250,000
Total Intangible assets 3,350,000

Note 5-Other noncurrent assets

Long-term refundable deposit 50,000

Advances to officers-not currently collectible 100,000
Total other non-current assets 150,000
Note 6- Trade and Other Payables

Accounts Payable 400,000

Notes Payable 300,000
Unearned Rent Income 40,000
SSS Payable 10,000
Accrued Salaries 100,000
Dividends Payable 120,000
Withholding tax Payable 30,000
Total Trade and Other Payable 1,000,000

Note 7- Share Capital

Preference Share Capital 2,000,000

Ordinary Share Capital 5,000,000
Total Share Capital 7,000,000

Note 8- Reserves

Share Premium- Preference 500,000

Share Premium Ordinary 200,000
Total Reserves 700,000