XY Corporation’s statement of financial position at theend of 2016 included the following items.
Land $ 30,000
Buildings 120,000
Equipment 90,000
Accum. depr.—buildings (30,000)
Accum. depr.—equipment (11,000)
Patents 40,000
Current assets 235,000
Total $474,000
Current liabilities 150,000
Bonds payable $100,000
Share capital—ordinary 180,000
Retained earnings 44,000
Total $474,000
The following information is available for2017.
1. Net income was $55,000.
2. Equipment (cost $20,000 and accumulated depreciation $8,000)was sold for $9,000.
3. Depreciation expense was $4,000 on the building and $9,000 onequipment.
4. Patent amortization was $2,500.
5. Current assets other than cash increased by $25,000. Currentliabilities increased by $13,000.
6. An addition to the building was completed at a cost of$27,000.
7. A long-term investment in debt securities was purchased for$16,000.
8. Bonds payable of $50,000 were issued.
9. Cash dividends of $25,000 were declared and paid.
10. Treasury shares were purchased at a cost of $11,000.
Instructions:
- Prepare a statement of financial position at December31, 2017.
- Prepare a statement of cash flows for2017.
- Discuss the uses and limitations of the statement offinancial position and the statement of cash flows.
