P5.4 Corrected Classified Statement of Financial
Position (LO 1, 2)
Kishwaukee Ltd.
Statement of Financial Position
December 31 2022
Assets
Non-current assest
Investments
Cash in bank
70,000.00
Treasury notes, at cost and fair value
138,000.00
208,000.00
Property, plant, equipment
Land
950,000.00
Buildings
1,640,000.00
Less: Accumulated depreciation
410,000.00
1,230,000.00
Total property, plant, equipment
2,180,000.00
Total non-current assets
2,388,000.00
Current assets
Cash (on hand)
175,900.00
Inventory
312,100.00
Accounts receivable
170,000.00
Total current assets
658,000.00
Total assets
£3,046,000.00
Equity and Liabilities
Equity
Share capital
1,150,000.00
Retained earnings
738,000.00
Less: treasury shares (50,000)
87,000.00
Equity attributsble to owners
Non-controlling interest
1,801,000.00
570,000.00
Total equity
£2,371,000.00
Non-current liabilities
Notes payable
500,000.00
Total non-current liabilities
500,000.00
Current Liabilities
Notes payable-current installment
100,000.00
Income tax payable
75,000.00
Total current liabilities
175,000.00
Total liabilities
675,000.00
Total equity and liabilities
£3,046,000.00
P5.5 Statement of Financial Position Adjustment and
Preparation (LO 1, 2)
Sargent Corp.
Statement of Financial Positions
For the Year Ended December 31, 2022
Assets
Non-current assest
Investments
Investment in share capital
270,000.00
Bond sinking fund
250,000.00
Land held for speculation
40,000.00
Land held for future use
270,000.00
830,000.00
Property, plant, equipment
Land
500,000.00
Buildings
1,040,000.00
Less: Accumulated depreciation
360,000.00
Equipment
450,000.00
Less: Accumulated equipment
180,000.00
Total property, plant, equipment
Intangible assets
680,000.00
270,000.00
1,450,000.00
Franchise
165,000.00
Goodwill
100,000.00
Total non-current assets
265,000.00
2,545,000.00
Current assets
Cash
150,000.00
Inventory
180,000.00
Accounts receivable
170,000.00
Less: Allowance for doubtful accounts
10,000.00
Trading securities
160,000.00
80,000.00
Total current assets
570,000.00
Total assets
£3,115,000.00
Equity and Liabilities
Equity
Share capital
450,000.00
Ordinary sales par value
100,000.00
Share premium-ordinary
900,000.00
Retained earnings
320,000.00
Total equity
£1,770,000.00
Non-current liabilities
Notes payable
120,000.00
7% bonds payable
960,000.00
Total non-current liabilities
1,080,000.00
Current Liabilities
Notes payable-current installment
80,000.00
Accounts payable
140,000.00
Income tax payable
40,000.00
Unearned revenue
5,000.00
Total current liabilities
Total liabilities
Total equity and liabilities
265,000.00
1,345,000.00
£3,115,000.00
P5.7 Preparation of a Statement of Cash Flows and
Statement of Financial Position (LO 1, 2, 3)
a.​
Luo Inc.
Statement of Cash Flows
For the Year Ended December 31, 2022
Cash flows from operating activities
Net income
¥35,000
Adjustment to reconcile Net Income to Net Cash
Depreciation Expense
¥12,000
Loss on sale of investment
5,000.00
Increase in accounts payable
10,000.00
Increase in accounts receivable
-20,800.00
Net cash provided by operating activities
6,200.00
41,200.00
Cash flows from investing activities
Sales of investments
27,000.00
Purchase of lands
-38,000.00
Net cash used by investing activities
-11,000.00
Cash flows from financing activities
Issuance of ordinary shares
27,000.00
Payment of cash dividends
-10,000.00
Net cash provided by financing activities
20,000.00
Net increase in cash
50,200.00
Cash at the beginning of the year
20,000.00
Cash at the end of the year
¥70,200
b.​
Luo Inc.
Statement of Financial Position
December 31, 2022
Assets
Equity and Liabilities
Plant assets (net)
69,000 (1.
Share capital-ordinary
130,000 (4.
Land
108,000 (2.
Retained earnings
48200 (5.
Accounts receivable
42,000
Bonds payable
71000 (3.
Cash
70,200
Accounts payable
40,000
¥289,200
¥289,200
1. 81,000 - 12,000
2. 40,000 + 38,000 + 30,000
3. 41,000 + 30,000
4. 100,000 + 30,000
5. 23,200 + 35,000 - 10,000
c.​
Free Cash Flow Analysis
Net cash provided by operating
activities
¥41,200
Less: Purchase of Land
(38,000.00)
Dividends
(10,000.00)
Free Cash Flow Analysis
-¥6,800
Net Cash Provided by
Cash debt coverage = Operating Activities/
Average Liabilities
1.18 = 41,200/ 35,000
d.​ Statement of financial position and statement of cash flows as a guide on what steps to
make to maintain the company’s performance. It reflects on the past and current
performance of the company so the user has a better understanding of the liquidity and
financial flexibility of the company.
CA 5.5 Presentation of Property, Plant, and
Equipment (LO 1, 2, 4)
a.​ The ethical issues involved are putting the depreciation on which would show the age of
the PPE. He tries not to incorporate necessary information which means his honesty and
integrity are to be questioned.
b.​ He should have disclosed the accumulated depreciation to show the entirety of the
situation. He may provide the information in a note disclosure.