The statement of financial position of Marigold Corporation follows for the current year, 2020: MARIGOLD CORPORATION Statement of Financial Position December 31, 2020 Current assets $ 455,900 Current liabilities $ 357,200 Investments 601,600 Long-term liabilities 902,400 Property, plant, and equipment 1,616,800 Shareholders' equity 1,663,800 Intangible assets 249,100 $2,923,400 $ 2,923,400 The following additional information is available: The current assets section includes the following: cash $ 141,000; accounts receivable $ 159,800, less $ 9,400 allowance doubtful accounts; inventory $ 169,200; and unearned revenue $ 4,700. The cash balance is composed of $ 178,600, less: bank overdraft of $ 37,600 (at a separate financial institution). Inventory is stated at the lower of FIFO cost and net realiza 1. value. The investments section includes the following: note receivable from a related company, due in 2026, $ 37,600; FV-NI investments in shares $ 75,200 (fair value $75,200); FV-OCI investments in 2. shares $ 117,500 (fair value $ 145,700); bond sinking fund $ 235,000; and patents $ 108,100, net of accumulated amortization. Property, Plant, and Equipment include buildings $ 977,600, less accumulated depreciation $ 338,400; equipment $ 423,0 less accumulated depreciation $ 169,200; land $ 470,000; and land held for future use $ 253,800. 3. 4. Intangible Assets include franchise, net of accumulated amortization, $ 249,100. Current liabilities include the following: accounts payable $ 131,600; notes payable, short-term $ 75,200, long-term $ 112,800; and income tax payable $ 37,600. 5. 6. Long-term liabilities are composed solely of 7% bonds payable issued at a discount, due in 2028. 7. Shareholders' equity has 70,000 preferred shares (200,000 authorized), which were issued for $ 423,000, and 94,000 common shares (unlimited number authorized), which were issued at an average price of $10 per share. In addition, the corporation has retained earnings of $ 272,600 and accumulated other comprehensive income of $ 28,200. (a) Prepare a statement of financial position in good form. (Adjust the amounts in each SFP classification based on the additional information ) (List Assets in order of liguidity List Property Plant and Fauipment in order of Land. Buildings and Eguinment)
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
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