PROBLEM 8-3 (IAA) – RELAX COMPANY

REPORT FORM

RELAX COMPANY
Statement of Financial Position
December 31, 2020

ASSETS

Note
Current assets:
Cash 400,000
Trades and other receivables 1 750,000
Inventories 1,000,000
Prepaid expenses 100,000
Total current assets 2,250,000

Noncurrent assets:
Property, plant, and equipment 2 5,600,000
Investment in associate 1,300,000
Intangible assets 3 350,000
Total noncurrent assets 7,250,000

Total assets 9,500,000

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Trade and other payables 4 1,350,000
Mortgage note payable - current portion 400,000
Total current liabilities 1,750,000

Noncurrent liabilities:
Mortgage payable - remaining portion 1,600,000
Bank loan payable - due on June 30, 2022 500,000
Total noncurrent liabilities 2,100,000

Shareholders' equity:
Share Capital 3,000,000
Reserves 5 1,400,000
Retained earnings unappropriated 1,250,000
Total shareholders' equity 5,650,000

Total liabilities and shareholders' equity 9,500,000

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 PROBLEM 8-3 (IAA) – RELAX COMPANY

NOTE 1 – TRADE AND OTHER RECEIVABLES

Accounts receivable 800,000

Allowance for doubtful accounts -50,000
750,000

NOTE 2 – PLANT, PROPERTY, AND EQUIPMENT

Land 500,000
Building 5,000,000
Machinery 3,000,000
Equipment 400,000
Total 8,900,000
Accumulated depreciation 3,300,000
Carrying amount 5,600,000

Accumulated depreciation
Accumulated depreciation - building 2,000,000
Accumulated depreciation - machinery 1,200,000
Accumulated depreciation 100,000
3,300,000

NOTE 3 – INTANGIBLE ASSETS

Trademark 150,000
Secret processes and formulas 200,000
350,000

NOTE 4 – TRADE AND OTHER PAYABLES

Accounts payable 350,000

Notes payable 750,000
Income tax payable 50,000
Accrued expenses 60,000
Estimated liability for damages 140,000
1,350,000

This study source was downloaded by 100000863566231 from CourseHero.com on 03-08-2023 01:41:22 GMT -06:00

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 PROBLEM 8-3 (IAA) – RELAX COMPANY

NOTE 5 – RESERVES

Share premium 300,000

Retained earnings appropriated for plant expansion 1,000,000
Retained earnings appropriated for contingencies 100,000
1,400,000

ACCOUNT FORM

RELAX COMPANY
Statement of Financial Position
December 31, 2020

ASSETS LIABILITIES AND EQUITY

Current assets: Current liabilities:
Cash 400,000 Trade and other payables 1,350,000
Trade and other receivables 750,000 Mortgage note payable - current portion 400,000
Inventories 1,000,000 Total current liabilities 1,750,000
Prepaid expenses 100,000
Total current assets 2,250,000 Noncurrent liabilities:
Mortgage payable - remaining portion 1,600,000
Bank loan payable - due on June 30,
Noncurrent assets: 2022 500,000
Property, plant, and equipment 5,600,000 Total noncurrent liabilities 2,100,000
Investment in associate 1,300,000
Intangible assets 350,000 Shareholders' equity:
Total noncurrent assets 7,250,000 Share capital 3,000,000
Reserves 1,400,000
Retained earnings unappropriated 1,250,000
Total shareholders' equity 5,650,000

Total assets 9,500,000 Total liabilities and shareholders' equity 9,500,000

This study source was downloaded by 100000863566231 from CourseHero.com on 03-08-2023 01:41:22 GMT -06:00

https://www.coursehero.com/file/89449937/CFAS-PROBLEM-8-3pdf/
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