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E5-10 (Current Assets Section of Statement of Financial Position)
Selected accounts follow of Armais Limited at December 31, 2020: Finished Goods Inventory $152,000 Cost of Goods Sold Unearned Revenue 90,000 Notes Receivable Bank Overdraft 8,000 Accounts Receivable Equipment 253,000 Raw Materials Inventory Work-in-Process Inventory 34,000 Supplies Expense Cash 50,000 Allowance for Doubtful Accounts FV-NI Investments 31,000 Intangible Assets - Trade Names Interest Payable 36,000 Contributed Surplus Restricted Cash (for Plant Expansion) 50,000 Common Shares The following additional information is available:
- Inventory is valued at the lower of cost and net realizable value using FIFO.
- Equipment is recorded at cost. Accumulated depreciation, calculated on a straight-line basis, is $50,
- The fair value - net income investments have a fair value of $ 29,
- The notes receivable are due April 30, 2021, with interest receivable every April 30. The notes bear interest at 6%
- Intangible Assets - Trade Names are reported net of accumulated amortization of $ 14,
- The bank overdraft is at the same bank as the amount reported above under Cash. Instructions Current Assets Section of the Balance Sheet Current Assets
- The allowance for doubtful accounts applies to the accounts receivable. Accounts receivable of $50,000 are pledged as collateral on a bank loan (a) Prepare the current assets section of Aramis Limited's statement of financial position as at December 31, 2020, with appropriate disclosures.
(b) Outline the other ways or methods that can be used to disclose the details that are required for the financial statement elements of part (a).
d for the financial statement
P5-
P5-2 Statement of financial position items for Montoya Inc. follow for the current year, 2020: Goodwill $125,000 Accumulated depreciation- equipment Payroll taxes payable 177,591 Inventory Bonds payable due 2024 285,000 Rent Payable Discount on bonds payable 15,000 Income tax payable Cash 360,000 Rent payable (long-term) Land 480,000 Common Shares (20,000 shares issued) Notes receivable 445,700 Preferred shares (15,000 shares issued) Notes payable 265,000 Prepaid expenses Accounts payable 490,000 Equipment Retained earnings? FV-NI investments Income tax receivable 97,630 Accumulated depreciation- building Notes payable (due in five years) 1,600,000 Buildings Instructions: Montoya Inc. Statement of Financial Position December 31, 2020 Assets Current Assets Property, plant, and equipment (a) Prepare a classified statement of financial position in good form. The numbers of authorized shares are as follows: unlimite and 20,000 preferred. Assume that income tax accounts, notes receivable, and notes payable are short-term, unless stated oth and that the fair value - net income investments are stated at fair value.
year, 2020:
uthorized shares are as follows: unlimited common
- $2,100, - 40,
- is, is $50, - ated depreciation- equipment $292, - y 239, - yable 45, - ax payable 98,
- yable (long-term) 480,
- n Shares (20,000 shares issued) 200,
- d shares (15,000 shares issued) 150,
- ent 1,470, - vestments 121, - ated depreciation- building 270,
c) Calculate the current and acid test ratios for 2019 and 2020. d) Calculate Aero's free cash flow and the current cash debt coverage ratio for 2020. b) Prepare a statement of cash flows for the year ended December 31, 2020 using the indirect method. Assume dividends paid are treated as financial activities.
e) What is the cash flow pattern? Discuss the sources and uses of cash. f) Use the analysis of Aero to illustrate how information in the statement of financial position and statement of cash flows helps the user of the financial statements.
method. Assume dividends
d statement of cash flows
