IV – AUDIT OF INVESTMENTS

SUMMARY OF PROBLEMS

PROBLEM NO. 1 – Analysis of investments in debts instruments – HFT, AFS, HTM (preparation of journal entries under different classifications)

PROBLEM NO. 2 – Audit of investments in equity instruments - FVTPL (including preparation of adjusting journal entries)

PROBLEM NO. 3 – Audit of investments in equity instruments – FVTOCI (including preparation of adjusting journal entries)

PROBLEM NO. 4 – Analysis of investments in equity instruments (Trading and AFS)

PROBLEM NO. 5 – Audit of investments in equity instruments (carried at cost) (including preparation of adjusting journal entries)

PROBLEM NO. 6 – Analysis of investments in equity and debt instruments

PROBLEM NO. 7 – Analysis of investments in equity instruments (FVTPL and Associate)

PROBLEM NO. 8 – Analysis of investments in equity instruments (AFS and Associate)

PROBLEM NO. 9 – Analysis of investments in debt instruments (HTM)

PROBLEM NO. 10 – Impairment of investments in debt instruments (HTM)

PROBLEM NO. 11 – Analysis of investments in associates of an SME

PROBLEM NO. 12 - Theory

Requirement A

FA@FVTPL Available for Sale (AFS) Held to Maturity (HTM)

A.1) Purchase of investment:

FA@FVTPL P874,164 AFS securities P924,164 HTM securities P924,164Commission exp. 50,000 Cash P924,164 Cash P924,164

Cash P924,164

A.2) Accrual of interest:

Interest receivable P80,000 Interest receivable P80,000 Interest receivable P80,000Interest income P80,000 Interest income P80,000 Interest income P80,000

No entry AFS securities P12,416 HTM securities P12,416Interest income P12,416 Interest income P12,416

A.4) FV adjustment:

FA@FVTPL P105,836* AFS securities P43,420** No entryFV adj. gain (P/L) P105,836 FV adj. G/L (OCI) P43,420

* (P980,000 - P874,164) ** (P980,000 - P936,580)

Amortization schedule:Date EI (10%) NI (8%) Disc. Amort. Amortized cost

1/1/2012 P 924,164 12/31/2012 P92,416 P80,000 P12,416 936,58012/31/2013 93,658 80,000 13,658 950,23812/31/2014 95,024 80,000 15,024 965,26212/31/2015 96,526 80,000 16,526 981,78812/31/2016 98,212 80,000 18,212 1,000,000

PROBLEM NO. 1 - Isabela Corporation

A.3) Amortization of discount (see schedule below):

Requirement B

Carrying amount, 12/31/12FA@FVTPL 980,000 Fair valueAvailable for Sale (AFS) 980,000 Fair valueHeld to Maturity (HTM) 936,580 Amortized cost

Requirement C

FA@FVTPL Available for Sale (AFS) Held to Maturity (HTM)

To update amortization To update amortization To update amortization

No entry AFS securities P13,658 HTM securities P13,658Interest income P13,658 Interest income P13,658

FV adjustment before sale FV adjustment before sale FV adjustment before sale

No entry FV adj. G/L (OCI) P3,658* No entryAFS securities P3,658

* (P990,000 - P993,658)

Disposal entry Disposal entry Disposal entry

Cash P1,070,000 Cash P1,070,000 Cash P1,070,000FA@FVTPL P980,000 FV adj. G/L (OCI) 39,762 HTM securities P950,238Interest income 80,000 AFS securities P990,000 Interest income 80,000Gain on sale of TS 10,000 Interest income 80,000 Gain on sale of HTMS 39,762

Gain on sale of AFS (P/L) 39,762

Requirement No. 1. aSales proceeds 540,000 CA of investment sold (P1,800,000 x 2,400/7,200) 600,000 Loss on sale of 2,400 BACK shares on 3/1/12 (60,000)

Requirement No. 1. bTotal proceeds 1,176,000 Less dividends sold (4,800 shares x P30) 144,000 Net proceeds 1,032,000 CA of investment sold (P1,320,000* x 4,800/6,600**) 960,000 Gain on sale of 4,800 4WARD shares on 8/15/12 72,000

Total cash paid 1,440,000 Less purchased dividend (6,000 x P20) 120,000 Adjusted cost 1,320,000 *

** after 10% share dividend

Sales proceeds 276,000 CA of investment sold (P1,320,000* x 1,200/6,600**) 240,000 Gain on sale of 800 4WARD shares on 9/1/12 36,000

Total gain on sale of 4WARD shares 108,000

Requirement No. 1. cDeclared January 2 - Declared May 2 - Declared August 1 (6,600 shares x P30) 198,000 Total dividend income for 2012 198,000

Requirement No. 1. d4WARD Co. [(6,000 x 1.1) - 4,800 - 1,200] = 600 x P210 126,000 BACK Co. (7,200 - 2,400) = 4,800 x P240 1,152,000 CA of trading securities (FV), 12/31/12 1,278,000

Requirement No. 2

Jan. 10 (See requirement 1.b)Dividend income 120,000

Trading securities - 4WARD 120,000

Feb. 20No AJE

Mar. 1 (See requirement 1.a)Loss on sale of TS - BACK 60,000

Trading securities - BACK 60,000

May 31Retained earnings 132,000

Trading securities - 4WARD 132,000

PROBLEM NO. 2 - IMBC Corporation

Aug. 15 (See requirement 1.b)Entry madeCash 1,176,000

Trading securities - 4WARD 1,176,000

Correct entryCash 1,176,000

Trading securities - 4WARD 960,000 Dividend income 144,000 Gain on sale of TS - 4WARD 72,000

Adjusting entryTrading securities - 4WARD 216,000

Dividend income 144,000 Gain on sale of TS - 4WARD 72,000

Sep. 1 (See requirement 1.b)Trading securities - 4WARD 36,000

Gain on sale of TS - 4WARD 36,000

Dec. 31 (Fair value adjustment)FV adjustment loss (P/L) 42,000

Trading securities 42,000

Computation of FV adjustment:January 10 1,320,000 February 20 1,800,000 March 1 (600,000)August 15 (960,000)September 1 (240,000)Should be balance, 12/31/12 before fair value adjustment 1,320,000 Fair value , 12/31/12 (see requirment 1.d) 1,278,000 Unrealized loss (FV adjustment) 42,000

Alternative computation:Adjusted cost of 4WARD shares (see requirment 1.b) 1,320,000 Cost of BACK shares 1,800,000 Total cost 3,120,000 Less costs of shares sold

March 1 600,000 August15 960,000 September 1 240,000 1,800,000

Adjusted cost, 12/31/12 1,320,000

4WARD Co. [(6,000 x 1.1) - 4,800 - 1,200] = 600 x P210 126,000 BACK Co. (7,200 - 2,400) = 4,800 x P240 1,152,000 Fair value of trading securities, 12/31/12 1,278,000

Unrealized loss (P1,278,000 - P1,320,000) 42,000

Investment ledgerParticulars Shares Cost/share Total Balance, 1/1/2012 10,000 39.00 390,000 Share dividend, 4/30/12 5,000 - Balance 15,000 26.00 390,000 Sale of 5,000 shares, 5/20/2012 (5,000) 26.00 (130,000)Balance 10,000 26.00 260,000 Sale of 2,000 shares, 12/10/2012 (2,000) 26.00 (52,000)Balance, 12/31/2012 8,000 208,000

Requirement No. 1. aLoss on sale 5/20 (see computation below) (5,000)Gain on sale 12/10 (see computation below) 48,000 Dividend income (see computation below) 150,000 Net amount to be recognized in P/L 193,000

Loss on sale 5/20:Sales proceeds (5,000 shares x P25) 125,000 Cost of investment sold (see investment ledger) (130,000)Loss on sale of investment (5,000)

Gain on sale 12/10:Sales proceeds (2,000 shares x P60) 120,000 Dividends sold (2,000 shares x P50 x 20%) (20,000)Net sales proceeds 100,000 Cost of investment sold (see investment ledger) (52,000)Gain on sale of investment 48,000

Dividend income:Cash dividends declared, 11/1/2012 (10,000 shares x P5) 50,000 Cash dividends declared, 12/1/2012 (10,000 shares x P50 x 20%) 100,000 Total dividend income 150,000

FV adjustment:Fair value 110,000 Cost 208,000 Unrealized loss (FV adjustment) - OCI (98,000)

Requirement No. 1. bCarrying amount, 12/31/12 (8,000 shares x P13.75) 110,000

Requirement No. 2. aAmount to be recognized in P/L - Dividend income 150,000

At initial recognition, an entity may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument within the scope of PFRS 9 that is not held for trading.

If an entity makes the election, it shall recognise in profit or loss dividends from that investment whenthe entity’s right to receive payment of the dividend is established in accordance with PAS 18.

Requirement No. 2. bCarrying amount, 12/31/12 (8,000 shares x P13.75) 110,000

PROBLEM NO. 3 - Pin Shop Company

Requirement No. 1Selling price (4,000 shares x P69) 276,000 CA of shares sold (P528,250 x 4/8) (264,125)Gain on sale of Totoy Bibo shares 11,875

Requirement No. 2Selling price (4,000 shares x P62) 248,000 Cost of shares sold (P590,000 x 4/10) (236,000)Gain on sale of Bulaklak shares 12,000

Requirement No. 3Yeye Bonel [(10,000+ 3,000) x P76.60] 995,800 Totoy Bibo [(8,000 - 4,000) x P68.50] 274,000 Pasaway (15,000 x P55.25) 828,750 Mayniladlad 205,550 Total fair value - Trading securities 2,304,100

Bulaklak Inc. [(10,000 - 4,000) x P61] 366,000 Jumbo Hotdog (20,000 x P27) 540,000 Total fair value - AFS 906,000

PROBLEM NO. 4 - La Cost Company

Entry made Should be entry Adjusting journal entry1/2 Cash 120,000 Note: the entry made can be considered Dividend income 120,000

Dividend income 120,000 correct if the company accrued the dividend Retained earnings 120,000 in 2011 and reversed in 2012. Since there wasno debit entry in the "Dividend Income" account,we will assume that no accrual was made in 2011.

3/2 Investment in Silver Tab 2,100,000 Investment in Silver Tab 2,070,000 Dividend income 30,000 Cash 2,100,000 Dividend income 30,000 * Investment in Silver Tab 30,000

Cash 2,100,000 *(30,000 x P1) - purchased dividend

7/15 Cash 2,000,000 Cash 2,000,000 Loss on sale 250,000 Investment in Silver Tab 2,000,000 Loss on sale 250,000 Investment in Silver Tab 250,000

(50,000 shares x P40) Investment in Silver Tab 2,250,000 **

Note: in the absence of specific identification,use FIFO to determine cost of investment sold

From 2010 lot (30,000 x P35) 1,050,000 From 2011 lot (20,000 x P60) 1,200,000

2,250,000 **

8/10 Investment in Red Tab 10,000 Investment in Red Tab 30,000 Investment in Red Tab 20,000 Dividend income 10,000 Dividend income 30,000 Dividend income 20,000

(100,000/10 x P1) (100,000/10 x P3)Note: Property dividend received is recorded at FV

12/20 Cash 100,000 Cash 100,000 Dividend income 100,000 Dividend income 100,000 Investment in Silver Tab 100,000 Investment in Silver Tab 100,000

Note: the dividend received is a liquidating dividend.

12/29 None AR - non trade 900,000 * AR - non trade 900,000 Investment in Silver Tab 590,000 Investment in Silver Tab 590,000 Gain on sale 310,000 Gain on sale 310,000

* (10,000 x P90)

From 2011 lot: Shares Cost Original cost 90,000 5,400,000 Sold on 7/15 (20,000) (1,200,000)Balance 70,000 4,200,000 Liquidating dividend -

(70,000 x P1) (70,000)Balance 70,000 4,130,000

(10,000/70,000 x P4,130,000)

Adjusted Investment in Silver Tab Adjusted Dividend IncomeUnadjusted balance 6,550,000 Unadjusted balance 380,000 AJE for 3/2 (30,000) AJE for 1/2 (120,000)AJE for 7/15 (250,000) AJE for 3/2 (30,000)AJE for 12/20 (100,000) AJE for 8/10 20,000 AJE for 12/29 (590,000) AJE for 12/20 (100,000)Adjusted balance 5,580,000 Adjusted balance 150,000

Adjusted Investment in Red TabUnadjusted balance 10,000

PROBLEM NO. 5 - Lee Buys Company

Entry made Should be entry Adjusting journal entry

PROBLEM NO. 5 - Lee Buys Company

AJE for 8/10 20,000 Adjusted balance 30,000

Requirement No. 1Sales proceeds 152,000 CA of shares sold (P288,000 x 8/16) (144,000)Gain on sale of 8,000 Laoag, Inc. shares 8,000

Requirement No. 2Sales proceeds (3,200 shares x P15) 48,000 Cost of shares sold (P960,000 x 3.2/80) (38,400)Gain on sale of 3,200 Batac, Inc. shares 9,600

Requirement No. 3Santiago bonds (P200,000 x 10%) 20,000 Ilocos bonds (P1,926,000 x 14%*) 269,640 Total interest income for 2012 289,640

*Computation of effective interest rate:

Carrying amount, 12/31/11 1,926,000 Less carrying amount, 1/2/11 (Cost) 1,900,000 Discount amortization for 2011 26,000 Add nominal interest (P2,000,000 x 12%) 240,000 Effective interest 266,000 Divide by carrying amount, 1/2/11 1,900,000 Effective interest rate 14.00%

Requirement No. 4Trading securities

Vigan, Inc. (9,600 x P22) 211,200 Laoag, Inc. [(16,000 - 8,000) x P15] 120,000 10% , P200,000 face value , Santiago bonds 151,200 Total fair value 482,400

Available-for-sale securitiesCandon Products (32,000 x P42) 1,344,000 Pagudpud, Inc. (240,000 x P28) 6,720,000 Batac, Inc. [(80,000 - 3,200) x P18] 1,382,400 Ilocos bonds (P2,000,000 x 1.01) 2,020,000 Total fair value 11,466,400

FV adjustment gain on transfer of securities (OCI)Carrying amount, 12/31/11 1,926,000 Add discount amortization in 2012:

Effective interest (P1,926,000 x 14%) 269,640 Nominal interest (P2,000,000 x 12%) 240,000 29,640

Carrying amount, 12/31/12 1,955,640 Fair value of Ilocos bonds on 12/31/12 (P2M x 1.01) 2,020,000 FV adjustment gain on transfer of securities (OCI) 64,360

PROBLEM NO. 6 - Norte Corporation

Amount to be recognized in profit or loss - Investment in TemplarGain on sale 10/05 (see computation below) 350,000 Gain on sale 11/30 (see computation below) 2,160,000 Dividend income (50,000 shares x P5) 250,000 FV adjustment gain 240,000 Net amount to be recognized in P/L 3,000,000

Gain on sale 10/05:Sales proceeds (20,000 shares x P65) 1,300,000 Less Cost of investment sold (see below) 950,000 Gain on sale 350,000

Cash paid 1,000,000 Less Purchased dividend 50,000 Correct acquisition cost 950,000

Gain on sale 11/30:Cash received 3,300,000 Less dividends sold (20,000 shares x P5) 100,000 Net sales proceeds 3,200,000 Less Cost of investment sold 1,040,000 Gain on sale 2,160,000

FV adjustment gain:Fair value, 12/31/12 (30,000 x P60) 1,800,000 Balance before FV adjustment (see investment ledger) 1,560,000 FV adjustment gain 240,000

Investment in Templar ledgerSept. 5 acquisition Shares Cost/share Total

Purchase, Sept. 5 20,000 47.50 950,000 (20,000) 47.50 (950,000)

Balance, Dec. 31, 2012 - -

Oct. 1 acquisition Shares Cost/share Total Purchase, Oct. 1 50,000 52.00 2,600,000 Sale, Nov. 30 (20,000) 52.00 (1,040,000)Balance, Dec. 31, 2012 30,000 52.00 1,560,000

Amount to be recognized in SFP - Investment in TemplarFair value, 12/31/12 (30,000 x P60) 1,800,000

Amount to be recognized in profit or loss - Investment in DarkShare of profit (P800,000 x .195) 156,000

Amount to be recognized in SFP - Investment in DarkAcquisition cost 1,170,000 Share of profit (P800,000 x .195) 156,000 Dividends received (P200,000 x .195) (39,000)Investment in stock balance, 12.31.11 1,287,000

* Use equity method since there is a significant influence, i.e. Gateway's President is represented in the board of directors.

PROBLEM NO. 7 - Gateway Company

Sale, Oct. 5 (use FIFO)

Requirement No. 1 Profit or loss - Dividend income 15,000 OCI - FV adjustment (P570,000 - P500,000) 70,000 Net amount in comprehensive income - 2010 85,000

Requirement No. 2 Profit or loss - Dividend income 20,000 OCI - FV adjustment (P525,000 - P570,000) (45,000) Net amount in comprehensive income - 2011 (25,000)

Requirement No. 3 None

Requirement No. 4 Fair value of original investment 525,000 Purchase price of 30% interest 1,575,000 Total cost of 40% interest 2,100,000 Share of profit - 2012

Based on reported amount (P550,000 x .4) 220,000 Excess of cost over underlying equity amortization

{[P2.1M - (P4.15M x .4)]/8} (55,000) 165,000 Dividends received (70,000) Carrying amount, 12/31/12 2,195,000

PROBLEM NO. 8 - JR Company

Requirement No. 1PV of principal (P6,000,000 x 0.5568) 3,340,800 PV of interest [(P6,000,000 x 4%) x 8.8633] 2,127,192 Purchase price 5,467,992

Requirement No. 2

Date EI (5%) NI (4%) Disc. Amort. Amort. Cost 6/1/11 5,467,992

12/1/11 273,400 240,000 33,400 5,501,392 6/1/12 275,070 240,000 35,070 5,536,462

12/1/12 276,823 240,000 36,823 5,573,285

Carrying amount, 12/1/11 (see amortization schedule) 5,501,392 Add discount amortization, 12/1/11 to 12/31/11 (P35,070/6) 5,845 Carrying amount, 12/31/11 5,507,237

Requirement No. 3Jan. 1 to May 31 (P275,070 x 5/6) 229,225 June 1 to Nov. 1 (P276,823 x 5/6) 230,686 Total interest income for 2012 459,911

Requirement No. 4Total proceeds 5,887,500 Accrued interest (P240,000 x 5/6) (200,000)Net proceeds 5,687,500 Less carrying amount, 11/1/12:

Carrying amount, 6/1/12 (see amortization schedule) 5,536,462 Add discount amortization, 6/1/12 to 11/1/12 (P36,823 x 5/6) 30,686 5,567,148

Gain on sale on investment in bonds 120,352

PROBLEM NO. 9 - Panday Corporation

Requirement No. 1

Cash flow PVF@8% PV, 1/1/09Principal 10,000,000 0.6806 6,806,000 Interest 1,000,000 3.9927 3,992,700 Purchase price, 1/1/09 10,798,700

Amortization schedule:EI (8%) NI (10%) Amort CA

1/1/09 10,798,700 12/31/09 863,896 1,000,000 (136,104) 10,662,596 12/31/10 853,008 1,000,000 (146,992) 10,515,604 12/31/11 841,248 1,000,000 (158,752) 10,356,852 12/31/12 828,548 1,000,000 (171,452) 10,185,400 12/31/13 814,832 1,000,000 (185,400) 10,000,000

- PV, 1/1/09 10,798,700 Premium amortization, 1/1 to 4/1 (P113,456 x 3/12) (34,026)PV, 4/1/09 10,764,674 Accrued interest (P10,000,000 x 10% x 3/12) 250,000 Total purchase price 11,014,674

Requirement No. 2

Refer to the amortization schedule 10,662,596

Alternative computation:

Cash flow PVF@8% PV, 12/31/09Principal 10,000,000 0.7350 7,350,000 Interest 1,000,000 3.3121 3,312,100 Carrying amount, 12/31/11 10,662,100

Requirement No. 3Carrying amount, 12/31/11 (see amortization schedule) 10,356,852 PV of expected cash flows (P8,000,000 x 0.7972) 6,858,400 Impairment loss 3,498,452

Alternative computation:

Cash flow PVF@8% PV, 12/31/11Principal 10,000,000 0.8573 8,573,000 Interest 1,000,000 1.7833 1,783,300 Carrying amount, 12/31/11 10,356,300 PV of expected cash flows (P8,000,000 x 0.8573) 6,858,400 Impairment loss 3,497,900

Requirement No. 4EI (8%) NI (10%) Amort CA

12/31/11 6,858,400 12/31/12 548,672 - 548,672 7,407,072 12/31/13 592,928 - 592,928 8,000,000

(362)

Requirement No. 5

Carrying amount, 12/31/12 (without impairment) 10,185,400 Carrying amount, 12/31/12 (with impairment) 7,407,072 Reversal of impairment loss 2,778,328

The limit on the amount of reversal is what the amortized cost of the asset would have been atthe date of reversal had the impairment loss not been recorded.

Alternative computation:

Cash flow PVF@8% PV, 12/31/12Principal 10,000,000 0.9259 9,259,000 Interest 1,000,000 0.9259 925,900

PROBLEM NO. 10 - Klootz Corporation

Carrying amount, 12/31/12 - without impairment 10,184,900 Carrying amount, 12/31/12 - with impairment 7,407,072 Impairment loss 2,777,828

Requirement No. 1 - SFP amount (Cost Model)

B C D Total Purchase price 10,000,000 15,000,000 28,000,000 53,000,000 Transaction costs 100,000 150,000 280,000 530,000 Total cost 10,100,000 15,150,000 28,280,000 53,530,000 Impairment loss* - - (14,030,000) (14,030,000) CA, 12/31/12 10,100,000 15,150,000 14,250,000 39,500,000

*Impairment loss computation: Total cost 10,100,000 15,150,000 28,280,000 FV less cost to sell (RA) 12,350,000 27,550,000 14,250,000

- - 14,030,000

Requirement No. 1 - P/L amount (Cost Model)

B C D Total Dividend income 250,000 2,000,000 - 2,250,000 Impairment loss - - (14,030,000) (14,030,000)

250,000 2,000,000 (14,030,000) (11,780,000)

Requirement No. 2 - SFP amount (Fair Value Model)

B C D Total Fair value 13,000,000 29,000,000 15,000,000 57,000,000

Requirement No. 2 - P/L amount (Fair Value Model)

B C D Total Transaction costs (100,000) (150,000) (280,000) (530,000) Dividend income 250,000 2,000,000 - 2,250,000 FV adjustment gain (loss)* 3,000,000 14,000,000 (13,000,000) 4,000,000

3,150,000 15,850,000 (13,280,000) 5,720,000

*FV adjustment gain (loss) Fair value 13,000,000 29,000,000 15,000,000 CA before FV adjustment 10,000,000 15,000,000 28,000,000

3,000,000 14,000,000 (13,000,000)

Requirement No. 3 - SFP amount (Equity Method)

B C D Total Purchase price 10,000,000 15,000,000 28,000,000 53,000,000 Transaction costs 100,000 150,000 280,000 530,000 SOPA (SOLA) 1,250,000 4,500,000 (5,000,000) 750,000 Dividends (250,000) (2,000,000) - (2,250,000) CA, 12/31/12 - before impairment 11,100,000 17,650,000 23,280,000 52,030,000 Impairment loss* - - (9,030,000) (9,030,000) CA, 12/31/12 11,100,000 17,650,000 14,250,000 43,000,000

*Impairment loss computation: CA, 12/31/12 - before impairment 11,100,000 17,650,000 23,280,000 FV less cost to sell (RA) 12,350,000 27,550,000 14,250,000

- - 9,030,000

Requirement No. 3 - P/L amount (Equity Method)

B C D Total SOPA (SOLA) 1,250,000 4,500,000 (5,000,000) 750,000 Impairment loss - - (9,030,000) (9,030,000)

1,250,000 4,500,000 (14,030,000) (8,280,000)

PROBLEM NO. 11 - Spurs Corporation (SME)

1 A2 D3 D4 D5 C6 A7 B8 B9 C

10 D

PROBLEM NO. 12 - Theory

A B C D 1 Cash on hand and in bank 38,700 35,002 34,402 35,502 2 Notes receivable 4,000 4,500 5,000 5,500 3 Accounts receivable 36,000 40,000 42,000 38,000 4 Allow. for doubtful accounts 1,800 2,000 2,100 1,900 5 Accounts receivable-net 40,100 38,000 40,000 39,900 6 Accounts receivable-others 2,750 - 500 1,000 7 Advances to officers and employees 3,840 1,000 2,840 3,740 8 Marketable securities 13,000 10,750 8,500 4,250 9 Allow. for decline in MV of marketable sec. 1,375 250 1,125 -

10 Inventories 15,400 20,000 24,600 16,000 11 Prepayments 100 500 - 900 12 Total curent assets 111,904 113,302 113,950 112,802 13 Property, plant and equipment 990,000 1,910,000 910,000 940,000 14 Accumulated depreciation 346,000 344,000 350,000 356,000 15 PPE-net 566,000 1,566,000 606,000 584,000 16 Total assets 677,904 713,950 679,302 678,802 17 Accounts payable 600 4,000 5,200 2,800 18 Accrued expenses 2,800 4,000 5,200 1,200 19 Total current liabilities 2,800 5,200 4,000 1,200 20 Bonds payable 397,000 400,000 363,000 360,000 21 Bond discount 37,000 3,000 43,000 40,000 22 Total liabilities 400,000 405,200 363,000 368,200 23 Common stock 311,102 200,000 108,750 308,750 24 Retained earnings, end. 125,104 108,750 111,102 94,750 25 Net sales 944,000 948,000 950,000 952,000 26 Cost of sales 669,600 665,000 661,000 664,400 27 Gross Profit 280,400 282,400 285,000 287,000 28 Operating expenses 270,798 264,798 270,000 264,000 29 Operating income 23,602 15,000 17,602 18,400 30 Other income 5,000 7,250 5,500 7,750 31 Other charges 6,500 9,000 6,000 3,000 32 Net income 16,352 11,000 17,000 14,000 33 Gain on sale of Maretable securities-SMC 1,000 2,250 1,750 - 34 Bond discount amortization 1,000 4,000 3,000 - 35 Dividend income-SMC Co. common 1,000 500 2,000 1,500