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Question
The following information was provided for Rose company. The purpose of presenting
these account balances is for you to prepare a statement of financial position as of December 31, 2018. Use the
report form in your presentation and provide a supporting schedule or notes to financial statements. Explain
also the importance of presenting this statement of financial position and the usefulness of these to users of
financial statements.
Accounts Receivable 600,000

Unearned rent income 60,000
Advances to officers-not currently collectible 150,000
Retained Earnings (Deficit) (2,700,000)
Sinking Fund 600,000
Share premium-preference 750,000
Building 7,500,000
Premium on bonds payable 1,500,000
Long-term refundable deposit 75,000
Preference share capital 3,000,000
Cash and cash equivalents 750,000
Share premium – ordinary 300,000
Cash surrender value 90,000
Notes payable 450,000
Equipment 1,500,000
SSS payable 15,000
Lease Rights 150,000
Accounts payable 600,000
Accrued interest on Notes Receivable 15,000
Accrued salaries 150,000
Inventories 1,950,000
Accumulate depreciation-building 3,000,000
Land 2,250,000
Accumulated depreciation-equipment 300,000
Land Held for speculation 750,000
Allowance for doubtful accounts 30,000
Notes Receivable 375,000
Bonds payable 7,500,000
Computer Software 4,875,000
Dividends payable 180,000
Prepaid Expenses 105,000
Ordinary share capital 7,500,000
Trading Securities 420,000
Withholding tax payable 45,000
Preference share redemption fund 525,000
Expert Solution
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Financial Statement are the statements created at the end of the period, to present the summary of
financial results of the organization including financial statement , income statement and cash flow
statement.
The following is the balance sheet as per report format:
Rose Company
Balance sheet
31 Dec 2018
Assets Liabilities
Particulars Amount Particulars
Property plant and 12975000 Shareholder's Fund
Investment 1875000 Long term liabilities
Long Term Loans 225000 Trade payables
Inventory 1950000 Other Current Liabilities
Cash & cash equivalents 750000
Trade receivable 945000
Other current assets 630000
Total Assets 19350000 Total Liabilities
Notes to Accounts:
Shareholder's Fund
Particulars Amount
Ordinary Share Capital 7500000
Preference share cpaital 3000000
Share premium ordinary 300000
retained earning -2700000
Share premium preference 750000
Dividend payable 180000
9030000
Total
Long term liabilities

Bonds Payable 7500000
Premium on bonds payable 1500000
Total 9000000
Trade payables
Notes payable 450000
SSS Payable 15000
Accounts Payable 600000
Other Current Liabilities 1065000
Other Current Liabilities

Particulars
Unearned rent income 60000
Accrued salaries 150000
Withholding tax payable 45000
255000
Property plant and

Particulars
Building 7500000
Accumulated depreciation building -3000000
Building (net) 4500000
Equipment 1500000
Accumulated depreciation Equipment -300000
Eqipment (net) 1200000
Lease rights 150000

Land 2250000
Computer software 4875000
Total 12975000
Investment
Particulars
sinking fund 600000
Land held for 750000
Preference share redemption 525000
Total 1875000
Long Term Loans

Particulars
Advances to officers 150000
Long term refundable 75000
Total 225000
Inventory
Particulars
Inventory 1950000
Total 1950000
Cash & cash equivalents

Particulars
Cash & cash equivalents 750000
Total 750000
Trade receivable
Particulars
Accounts receivable 600000
Notes receivable 375000
Allowance for doubtful assets -30000
Total 945000
Other current assets

Particulars
Cash surrender value 90000
Accrued interest on 15000
Prepaid expenses 105000
Trading securities 420000
Total 630000
The following are the importance and usefulness of the financial statements to the users:
1. The information provided by the financial statements are needed by their shareholder's to
evaluate their investment.
2. These are needed by the government authorities for taxation and audit purposes. Also they need it
for research and development wing of the government.
3. The importance of FS to the employees is that they want to know how much is the company
earning and according the amount of bonus they will get.
4. The statements are important to the creditors because they want to judge the company on the
basis of its liquidity, profitability and the amount of debt in the firm.
IS T HIS ANS WE R HE LPFUL?

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Accounts Receivable 600,000

The following is the balance sheet as per report format:

Total Assets 19350000 Total Liabilities

Long term liabilities

Other Current Liabilities

Property plant and

Lease rights 150000

Long Term Loans

Cash & cash equivalents

Other current assets

IS T HIS ANS WE R HE LPFUL?

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