Swifty Corp. has decided to expand its operations. The bookkeeper recently completed the following statement of financial position in order to obtain additional funds for expansion:SWIFTY CORP.Statement of Financial PositionFor the Year Ended December 31, 2020Current assets Cash (net of bank overdraft of $35,000) $290,000 Accounts receivable (net) 510,000 Inventory at the lower of cost and net realizable value 551,000 FV-NI investments (at cost—fair value $180,000) 150,000 Property, plant, and equipment Buildings (net) 720,000 Equipment (net) 180,000 Land held for future use 335,000 Intangible assets Goodwill 90,000 Investment in bonds to collect cash flows, at amortized cost 97,000 Prepaid expenses 22,000 Current liabilities Accounts payable 225,000 Notes payable (due next year) 295,000 Pension obligation 101,000 Rent payable 59,000 Long-term liabilities Bonds payable 634,000 Shareholders’ equity Common shares, unlimited authorized, 310,000 issued 310,000 Contributed surplus 370,000 Retained earnings ? (a)Prepare a revised statement of financial position using the available information. Assume that the bank overdraft relates to a bank account held at a different bank from the account with the cash balance. Assume that the accumulated depreciation balance for the buildings is $230,000 and that the accumulated depreciation balance for the equipment is $135,000. The allowance for doubtful accounts has a balance of $22,000. The pension obligation is considered a long-term liability. (List Current Assets in order of liquidity. List Property, Plant and Equipment in order of Land, Buildings and Equipment.)

Solution:- Given, Swifty Corp. has decided to expand its operations and given statement of financial…

Answered: (a) Prepare a revised statement of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Swifty Corp. has decided to expand its operations. The bookkeeper recently completed the following statement of financial position in order to obtain additional funds for expansion:

SWIFTY CORP. Statement of Financial Position For the Year Ended December 31, 2020
Current assets
	Cash (net of bank overdraft of $35,000)	$	290,000
	Accounts receivable (net)		510,000
	Inventory at the lower of cost and net realizable value		551,000
	FV-NI investments (at cost—fair value $180,000)		150,000
Property, plant, and equipment
	Buildings (net)		720,000
	Equipment (net)		180,000
	Land held for future use		335,000
Intangible assets
	Goodwill		90,000
	Investment in bonds to collect cash flows, at amortized cost		97,000
	Prepaid expenses		22,000
Current liabilities
	Accounts payable		225,000
	Notes payable (due next year)		295,000
	Pension obligation		101,000
	Rent payable		59,000
Long-term liabilities
	Bonds payable		634,000
Shareholders’ equity
	Common shares, unlimited authorized, 310,000 issued		310,000
	Contributed surplus		370,000
	Retained earnings		?

(a)

Prepare a revised statement of financial position using the available information. Assume that the bank overdraft relates to a bank account held at a different bank from the account with the cash balance. Assume that the accumulated depreciation balance for the buildings is $230,000 and that the accumulated depreciation balance for the equipment is $135,000. The allowance for doubtful accounts has a balance of $22,000. The pension obligation is considered a long-term liability. (List Current Assets in order of liquidity. List Property, Plant and Equipment in order of Land, Buildings and Equipment.)

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