Question

Selected accounts follow of Blue Spruce Limited at December 31, 2020:

Finished Goods Inventory		$159,000		Cost of Goods Sold		$2,800,000
Unearned Revenue		109,000		Notes Receivable		47,000
Bank Overdraft		8,300		Accounts Receivable		211,000
Equipment		303,000		Raw Materials Inventory		357,000
Work-in-Process Inventory		39,000		Supplies Expense		72,000
Cash		67,000		Allowance for Doubtful Accounts		22,000
FV-NI Investments		35,000		Intangible Assets—Trade Names		24,000
Interest Payable		44,000		Contributed Surplus		15,000
Restricted Cash (for Plant Expansion)		67,000		Common Shares		285,000

The following additional information is available:

1.		Inventory is valued at the lower of cost and net realizable value using FIFO.
2.		Equipment is recorded at cost. Accumulated depreciation, calculated on a straight-line basis, is $69,600.
3.		The FV-NI investments have a fair value of $35,000.
4.		The notes receivable are due April 30, 2021, with interest receivable every April 30. The notes bear interest at 6%. (Hint: Accrue interest due on December 31, 2020.)
5.		The allowance for doubtful accounts applies to the accounts receivable. Accounts receivable of $67,000 are pledged as collateral on a bank loan.
6.		Intangible Assets—Trade Names are reported net of accumulated amortization of $17,000.
7.		The bank overdraft is at the same bank as the amount reported above under Cash.

(a)

Prepare the current assets section of Blue Spruce Limited’s statement of financial position as at December 31, 2020. (List Current Assets in order of liquidity.)

Answer 1

Blue Spruce Limited
Balance Sheet (Partial)
December 31, 2020
Current Assets
Cash	67,000
Less: Bank Overdraft	8,300	58,700
FV - NI Investments		35,000
Accounts receivable	211,000
Less: Allowance for Doubtful Accounts	22,000	189,000
Notes Receivable		47,000
Interest Receivable		1,880
Inventories
Raw Materials	357,000
Work in Process	39,000
Finished Goods	159,000	555,000
Total current assets		886,580