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    P5 4

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    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.

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    P5 4

    Uploaded by

    Monica Hutagaol
    132 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.

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    P5.4

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    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.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    132 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.

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

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