Problem 2-15

Dilemma Company Statement of Financial Position December 31, 2012

ASSETS Current assets: Cash Trading equity securities Trade and other receivables Inventory Prepaid expenses Total current assets Noncurrent assets: Property, plant and equipment Intangible asset Total noncurrent assets Total assets Note (1) 800,000 440,000 700,000 1,000,000 160,000 3,100,000 (2) (3) 6,700,000 200,000 6,900,000 10,000,000

LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities: Trade and other payables (4) 1,800,000 250,000 2,050,000 1,200,000

Noncurrent liabilities: Bonds payable (5) Note payable to bank, due July 1, 2014 Total noncurrent liabilities

Shareholders equity: Share capital, P100 par, 40,000 shares authorized 30,000 shares issued 3,000,000 Reserves (6) 250,000 Retained earnings (7) 3,750,000 Treasury shares, at cost, 2,000 shares ( 250,000) Total shareholders equity Total liabilities and shareholders equity

6,750,000 10,000,000

Note 1 - Trade and other receivables Accounts receivable Allowance for doubtful accounts Total Note 2 - Property, plant and equipment Cost Land Building in process Machinery and equipment Total Note 3 - Intangible asset Patent 200,000 500,000 5,000,000 1,500,000 7,000,000 Accum. depr. 300,000 300,000 Book value 500,000 5,000,000 1,200,000 6,700,000 750,000 ( 50,000) 700,000

Note 4 - Trade and other payables Accounts payable Accrued expenses Accrued interest on bonds payable (2,000,000 x 10% x 3/12) Liability for loss on lawsuit Total 900,000 150,000 50,000 100,000 1,200,000

Note 5 - Bonds payable Bonds payable Discount on bonds payable 2,000,000 ( 200,000) 1,800,000

Note 6 - Reserves Retained earnings appropriated for treasury shares 250,000

Note 7 - Retained earnings Unadjusted balance Add: Cancelation of appropriation for contingencies Total Less: Interest accrued on bonds payable Appropriated for treasury stock Actual loss on lawsuit Unappropriated retained earnings 4,000,000 150,000 4,150,000 50,000 250,000 100,000

400,000 3,750,000

Problem 2-16 Socorro Corporation Statement of Financial Position December 31, 2012

ASSETS Current assets: Cash and cash equivalents Trade accounts receivable Inventories Prepaid expenses Total current assets Noncurrent assets: Property, plant and equipment Long-term investment Investment property Intangible assets Other noncurrent assets Total noncurrent assets Total assets Note (1) (2) (3)

700,000 700,000 600,000 50,000 2,050,000

(4) (5) (6) (7) (8)

4,150,000 1,000,000 500,000 550,000 450,000 6,650,000 8,700,000

LIABILITIES AND EQUITY Current liabilities: Trade and other payables Serial bonds payable-current portion Total current liabilities

(9)

820,000 100,000 920,000

Noncurrent liabilities: Serial bonds payable-remaining portion Unearned leasehold income-remaining portion Total noncurrent liabilities Equity: Share capital Reserves Retained earnings Treasury shares, at cost Total equity Total liabilities and equity

400,000 280,000 680,000

(10) (11) (12)

5,150,000 1,050,000 1,200,000 ( 300,000) 7,100,000 8,700,000

Note 1 - Cash and cash equivalents Cash Money market placement Total Note 2 - Trade accounts receivable Accounts receivable Allowance for doubtful accounts Net realizable value Note 3 - Prepaid expenses Store supplies Note 4 - Property, plant and equipment Cost 400,000 3,500,000 1,000,000 4,900,000 Accum. depr. 500,000 250,000 750,000 Book value 400,000 3,000,000 750,000 4,150,000 50,000 750,000 ( 50,000) 700,000 500,000 200,000 700,000

Land Building Equipment Total

Note 5 Long-term investment Investment in bonds Note 6 Investment property Land for undetermined use Note 7 - Intangible assets Trademark Patent Total 300,000 250,000 550,000 500,000 1,000,000

Note 8 - Other noncurrent assets Advances to officers Restricted foreign deposit Total 150,000 300,000 450,000

Note 9 - Trade and other payables Accounts payable Note payable Income tax payable Unearned leasehold income-current portion Total 500,000 100,000 150,000 70,000 820,000

Note 10 - Common stock Share capital issued Stock dividend payable Total Note 11 - Reserves Share premium Retained earnings appropriated for plant expansion Retained earnings appropriated for treasury share Total reserves Note 12 - Retained earnings Retained earnings unappropriated Appropriation for treasury share Adjusted balance 1,500,000 ( 300,000) 1,200,000 250,000 500,000 300,000 1,050,000 5,000,000 150,000 5,150,000

Problem 2-18 Summa Company Statement of Financial Position December 31, 2012 ASSETS Current assets: Cash Trade and other receivables Inventory Prepaid expenses Total current assets Noncurrent assets: Property, plant and equipment Investment property Bond sinking fund Intangible asset Total noncurrent assets Total assets Note (1) (2)

700,000 830,000 1,200,000 100,000 2,830,000

(3) 5,500,000 700,000 2,000,000 (4) 370,000 8,570,000 11,400,000

LIABILITIES AND EQUITY Current liabilities: Trade and other payables Bonds payable due June 30, 2009 Total current liabilities Noncurrent liability: Deferred tax liability Equity: Share capital Reserves Retained earnings Total equity Total liabilities and equity Note (5) 2,050,000 2,000,000 4,050,000

650,000

(6) (7)

3,500,000 500,000 2,700,000 6,700,000 11,400,000

Note 1 - Cash Cash on hand Cash in bank 50,000 650,000 700,000

Note 2 - Trade and other receivables Accounts receivable Allowance for doubtful accounts Notes receivable Accrued interest receivable Total Note 3 - Property, plant and equipment Cost 1,000,000 5,500,000 2,400,000 8,900,000 Accum. depr. 2,500,000 900,000 3,400,000 Book value 1,000,000 3,000,000 1,500,000 5,500,000 650,000 ( 50,000) 200,000 30,000 830,000

Land Building Furniture and equipment Total Note 4 - Intangible asset Patent

370,000

Note 5 - Trade and other payables Accounts payable Notes payable Accrued taxes Other accrued liabilities Total Note 6 Share capital Authorized share capital, 50,000 shares, P100 par Unissued share capital Issued share capital Subscribed share capital, 10,000 shares 1,000,000 Subscription receivable ( 500,000) Paid in capital Note 7 - Reserves Share premium Retained earnings appropriated for contingencies Total 300,000 200,000 500,000 5,000,000 (2,000,000) 3,000,000 500,000 3,500,000 1,000,000 850,000 50,000 150,000 2,050,000