Learning Materials
Features
Discover
Chapter 5: Question 3IFRS (page 262)
IFRS5-3 Briefly describe the convergence efforts related to financial statement presentation.
IASB and FASB both are working on projects to develop reporting standards of financial statements.
Over 30 million students worldwide already upgrade their learning with Vaia!
All the tools & learning materials you need for study success - in one app.
Get started for free
Lansbury Inc. had the following balance sheet on December 31, 2016.
LANSBURY INC. | |||
BALANCE SHEET | |||
DECEMBER 31, 2016 | |||
Cash | \(20,000 | Account payable | \)30,000 |
Accounts receivables | 21,200 | Note payable | 41,000 |
Investment | 32,000 | Common stock | 100,000 |
Plant assets (net) | 81,000 | Retained earnings | 23,200 |
Land | 40,000 | ||
\(194,200 | \)194,200 |
During 2017, the following occurred.
1. Lansbury Inc. sold part of its debt investment portfolio for \(15,000. This transaction resulted in a gain of \)3,400 for the firm. The company classifies these investments as available for sale.
2. A tract of land was purchased for \(13,000 cash.
3. Long-term notes payable in the amount of \)16,000 were retired before maturity by paying \(16,000 cash.
4. An additional \)20,000 in common stock was issued at par.
5. Dividends of \(8,200 were declared and paid to stockholders.
6. Net income for 2017 was \)32,000 after allowing for depreciation of \(11,000.
7. Land was purchased through the issuance of \)35,000 in bonds.
8. At December 31, 2017, Cash was \(37,000, Accounts Receivable was \)41,600, and Accounts Payable remained at $30,000.
Instructions
(a) Prepare a statement of cash flows for 2017.
(b) Prepare an unclassified balance sheet as it would appear at December 31, 2017.
(c) How might the statement of cash flows help the user of the financial statements? Compute two cash flow ratios.
The net income for the year for Genesis, Inc. is \(750,000, but the statement of cash flows reports that the net cash provided by operating activities is \)640,000. What might account for the difference?
What is working capital? How does working capital relate to the operating cycle?
How does separating current assets from property, plant, and equipment in the balance sheet help analysts?
(Preparation of a Classified Balance Sheet) Assume that Denis Savard Inc. has the following accounts at the end of the current year.
1. Common Stock.
2. Discount on Bonds Payable.
3. Treasury Stock (at cost).
4. Notes Payable (short-term).
5. Raw Materials.
6. Preferred Stock Investments (long-term).
7. Unearned Rent Revenue.
8. Work in Process.
9. Copyrights.
10. Buildings.
11. Notes Receivable (short-term).
12. Cash.
13. Salaries and Wages Payable.
14. Accumulated Depreciation—Buildings.
15. Restricted Cash for Plant Expansion.
16. Land Held for Future Plant Site.
17. Allowance for Doubtful Accounts.
18. Retained Earnings.
19. Paid-in Capital over Par—Common Stock.
20. Unearned Subscriptions Revenue.
21. Receivables—Officers (due in one year).
22. Inventory (finished goods).
23. Accounts Receivable.
24. Bonds Payable (due in 4 years).
25. Noncontrolling Interest.
Instructions
Prepare a classified balance sheet in good form. (No monetary amounts are necessary.)
What do you think about this solution?
We value your feedback to improve our textbook solutions.
Explanations 
Textbooks 
Exams 
GCSE 
IGCSE 
AS 
A Level 
International A Level 
University Admissions Tests 
Flashcards 
Vaia AI 
Notes 
Study Plans 
Study Sets 
Find a job 
Find a degree 
Student Deals 
Magazine 
Mobile App