Scribd Logo
Upload

Welcome to Scribd!

  • 173 views

    P5 4

    Uploaded by

    Monica Hutagaol
    Kishwaukee Ltd.'s statement of financial position as of December 31, 2019 requires corrections. Goodwill of £120,000 was incorrectly credited to retained earnings and should be recognized as an intangible asset. Accumulated depreciation on buildings of £410,000 was misclassified as a current liability and should be reclassified as a contra-asset. A corrected classified statement of financial position must be prepared reclassifying goodwill, accumulated depreciation, and removing the gain on goodwill from retained earnings.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    P5 4

    Uploaded by

    Monica Hutagaol
    173 views3 pages
    Kishwaukee Ltd.'s statement of financial position as of December 31, 2019 requires corrections. Goodwill of £120,000 was incorrectly credited to retained earnings and should be recognized as an intangible asset. Accumulated depreciation on buildings of £410,000 was misclassified as a current liability and should be reclassified as a contra-asset. A corrected classified statement of financial position must be prepared reclassifying goodwill, accumulated depreciation, and removing the gain on goodwill from retained earnings.

    Original Title

    P5.4

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Kishwaukee Ltd.'s statement of financial position as of December 31, 2019 requires corrections. Goodwill of £120,000 was incorrectly credited to retained earnings and should be recognized as an intangible asset. Accumulated depreciation on buildings of £410,000 was misclassified as a current liability and should be reclassified as a contra-asset. A corrected classified statement of financial position must be prepared reclassifying goodwill, accumulated depreciation, and removing the gain on goodwill from retained earnings.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    173 views3 pages

    P5 4

    Uploaded by

    Monica Hutagaol
    Kishwaukee Ltd.'s statement of financial position as of December 31, 2019 requires corrections. Goodwill of £120,000 was incorrectly credited to retained earnings and should be recognized as an intangible asset. Accumulated depreciation on buildings of £410,000 was misclassified as a current liability and should be reclassified as a contra-asset. A corrected classified statement of financial position must be prepared reclassifying goodwill, accumulated depreciation, and removing the gain on goodwill from retained earnings.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    P5.

    4 (LO1, 2) (Preparation of a Corrected Statement of Financial Position) The statement of


    financial position of Kishwaukee Ltd. as of December 31, 2019, is as follows.

    Note 1: Goodwill in the amount of £120,000 was recognized because the company believed
    that book value was not an accurate representation of the fair value of the company. The gain
    of £120,000 was credited to Retained Earnings.

    Note 2: Notes payable are non-current except for the current instalment due of £100,000.

    Instructions
    Prepare a corrected classified statement of financial position in good form. The notes above
    are for information only.
    Kishwaukee Ltd.
    Statement of Financial Position
    December 31, 2019
    Assets
    Current Assets  
    £
    Goodwill
    120.000
    Inventory 312.100
    Accounts Receivable 170.000
    Cash on hand 175.900
      778.000
    Non-current Assets  
    1.640.00
    Buildings
    0
    Land 950.000
    Treasury shares (50.000 shares) 87.000
    Assets allocated to trustee for plant expansion  
      Cash in bank 70.000
      Treasury notes, at cost and fair value 138.000
    2.885.00
     
    0
    3.663.00
    Total Assets
    0
    Liabilities and Equities
    Current liabilities
    £
    Short-term notes payable
    100.000
    Income taxes payable 75.000
    Accumulated Depreciation Buildings 410.000
      585.000
    Non-current liabilities  
    Long-term notes payable 500.000
      500.000
    Equities  
    Share capital—ordinary, authorized and issued, 1,000,000 shares, no 1.150.00
    par 0
    Retained earnings 858.000
    Non-controlling interest 570.000
    2.578.00
      0
    3.663.00
    Total Liabilities and Equities
    0

    You might also like