Question

Wright Corporation had the following permanent accounts and ending balances on December 31, 2020 (before adjusting...

Wright Corporation had the following permanent accounts and ending balances on December 31, 2020 (before adjusting entries):

Dr. ($)

Cr. ($)

Cash

350,000

Equipment

1,600,000

Bonds payable

900,000

Retained earnings

330,000

Allowance for Doubtful Accounts

    9,000

FV-OCI investments

600,000

Inventory

720,000

Accumulated Depreciation-Equipment

120,000

Accounts payable

560,000

Accounts receivable

320,000

Common shares

1,700,000

Prepaid insurance

20,000

FV-NI investments

180,000

There have been no transactions recorded in Allowance for Doubtful Accounts over the year. The company should recognize bad debt expenses for $5,000 at the end of 2020. The company prepaid $20,000 for one-year insurance becoming effective on October 1, 2020. The company purchased the equipment on July 1, 2018, and estimated that the useful life of the equipment is 20 years and there is no residual value of the equipment. The company adopted straight-line method to account for depreciation. On December 31, 2020, the fair values of FV-NI investment and FV-OCI investments were $200,000 and $520,000, respectively. The company used the perpetual inventory system. There were no accrued interest and discount/premium on bonds, and other accrual items. Please do not consider the income tax effect.


prepare a statement of financial position
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