Wright Corporation had the following permanent accounts and ending balances on December 31, 2019 (before adjusting entries): Cr. (S) Cash Equipment Bonds payable Retained earnings Allowance for Expected Credit Losses FV-OCI investments Inventory Accumulated Depreciation-Equipment Accounts payable Accounts receivable Common shares Prepaid insurance FV-NI investments Dr. (S) 350,000 1,600,000 600,000 720,000 320,000 20,000 180,000 900,000 330,000 9,000 120,000 560,000 1,700,000 There were no transactions recorded in Allowance for Expected Credit Losses during the year. The company should recognize bad debt expenses for $5,000 at the end of 2019. The company prepaid $20,000 for one-year insurance becoming effective on October 1, 2019. The company purchased the equipment on July 1, 2017, and estimated that the useful life of the equipment is 20 years and there is no residual value of the equipment. The company adopted straight-line method to account for depreciation. On December 31, 2019, the fair values of FV-NI investment and FV-OCI investments were $200,000 and $520,000, respectively. The company used the perpetual inventory system. There were no accrued interest and discount/premium on bonds, and other accrual items. Please do not consider the income tax effect. Required: Prepare a statement of financial position as at December 31, 2019, presenting assets and liabilities in order of liquidity.
Wright Corporation had the following permanent accounts and ending balances on December 31, 2019 (before adjusting entries): Cr. (S) Cash Equipment Bonds payable Retained earnings Allowance for Expected Credit Losses FV-OCI investments Inventory Accumulated Depreciation-Equipment Accounts payable Accounts receivable Common shares Prepaid insurance FV-NI investments Dr. (S) 350,000 1,600,000 600,000 720,000 320,000 20,000 180,000 900,000 330,000 9,000 120,000 560,000 1,700,000 There were no transactions recorded in Allowance for Expected Credit Losses during the year. The company should recognize bad debt expenses for $5,000 at the end of 2019. The company prepaid $20,000 for one-year insurance becoming effective on October 1, 2019. The company purchased the equipment on July 1, 2017, and estimated that the useful life of the equipment is 20 years and there is no residual value of the equipment. The company adopted straight-line method to account for depreciation. On December 31, 2019, the fair values of FV-NI investment and FV-OCI investments were $200,000 and $520,000, respectively. The company used the perpetual inventory system. There were no accrued interest and discount/premium on bonds, and other accrual items. Please do not consider the income tax effect. Required: Prepare a statement of financial position as at December 31, 2019, presenting assets and liabilities in order of liquidity.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Wright Corporation had the following permanent accounts and ending balances on December 31,
2019 (before adjusting entries):
Cr. ($)
Cash
Equipment
Bonds payable
Retained earnings
Allowance for Expected Credit Losses
FV-OCI investments
Inventory
Accumulated Depreciation-Equipment
Accounts payable
Accounts receivable
Common shares
Prepaid insurance
FV-NI investments
Dr. (S)
350,000
1,600,000
600,000
720,000
320,000
20,000
180,000
900,000
330,000
9,000
120,000
560,000
1,700,000
There were no transactions recorded in Allowance for Expected Credit Losses during the year.
The company should recognize bad debt expenses for $5,000 at the end of 2019. The company
prepaid $20,000 for one-year insurance becoming effective on October 1, 2019. The company
purchased the equipment on July 1, 2017, and estimated that the useful life of the equipment is
20 years and there is no residual value of the equipment. The company adopted straight-line
method to account for depreciation. On December 31, 2019, the fair values of FV-NI investment
and FV-OCI investments were $200,000 and $520,000, respectively. The company used the
perpetual inventory system. There were no accrued interest and discount/premium on bonds, and
other accrual items. Please do not consider the income tax effect.
Required:
Prepare a statement of financial position as at December 31, 2019, presenting assets and
liabilities in order of liquidity.
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