The following statement of financial position was prepared b

The following statement of financial position was prepared by Peter Quill, bookkeeper for Nova Corp.at December 31, 2018.

Nova Corp.

Statement of Financial Position

December 31, 2018

                Cash                                                       $ 90,000                      Accounts payable                                                                       $ 75,000

Accounts receivable (net)             

52,200

Long-term liabilities            

110,000

Inventories                                     

57,000

Shareholders’ equity          

208,500

Investments                                   

76,300

Equipment (net)                            

86,000

Patents                                            

32,000

                                                                               $393,500                     $393,500

The following additional information is provided:

- “Cash” includes prepaid insurance of $9,400; as well, a bank overdraft of $1,500 has been deducted.

- The net accounts receivable balance includes:

a. accounts receivable—debit balances $62,000;

b. accounts receivable—credit balances $5,000;

c. allowance for doubtful accounts $4,800.

- Inventories do not include goods costing $5,000 shipped out on consignment. Receivables of $5,000 were recorded on these goods.

- Investments include investments in common shares, trading $24,000 and long-term $43,300, and franchises $9,000.

- Equipment costing $8,000 with accumulated depreciation $6,000 is no longer used and is held for sale. Accumulated depreciation on the other equipment is $40,000.

Required

1. Prepare a statement of financial position in good form (shareholders’ equity details can be omitted.)

Accounts receivable (net)	52,200		Long-term liabilities	110,000
Inventories	57,000		Shareholders’ equity	208,500
Investments	76,300
Equipment (net)	86,000
Patents	32,000

Solution

ASSETS Investments: Available for sale securities 43300 Property, plant and equipment: Equipment (86000+46000-8000) 124000 Less: Acccumulated depreciation 40000 84000 Intangible assets: Patents 32000 Franchises 9000 41000 Current Assets: Equipment held for sale (8000-6000) 2000 Inventories (57000+5000) 62000 Accounts receivable (62000-5000) 57000 Less: Allowance for doubtful accounts 4800 52200 Trading securities 24000 Prepaid insurance 9400 Cash (90000-9400+1500) 82100 Total current assets 231700 Total assets 400000 EQUITY AND LIABILITIES Shareholders\' equity 208500 Non-current liabilities 110000 Current liabilities: Accounts payable (75000+5000) 80000 Bank overdraft 1500 Total current liabilities 81500 Total liabilities 191500 Total liabilities and shareholders\' equity 400000