The trial balance of Eastwood Inc. and other related information for the year 2020 follows:

Additional information:

1. The inventory has a net realizable value of $212,000. The FIFO method of inventory valuation is used.

2. The FV-OCI investments? fair value is $378,000.

3. The amount of the Construction in Process account represents the costs to date on a building in the process of construction. (The company is renting factory space while waiting for the new building to be completed.) The land that the building is being constructed on cost $85,000, as shown in the trial balance.

4. The company purchased the patents at a cost of $40,000 and the patents are being amortized on a straight-line basis.

5. The bonds payable have a face value of $200,000, bear interest at 7% payable every December 31, and are due January 1, 2032.

6. Of the remaining $20,000 unamortized discount on bonds payable (face value $200,000 less carrying amount $180,000), $2,000 will be amortized in 2021.

7. The notes payable represent bank loans that are secured by FV-OCI investments carried at $120,000.

These loans are due in 2021.

8. For common shares, an unlimited number are authorized and 500,000 are issued and outstanding.

Instructions

a. Prepare a statement of financial position as at December 31, 2020, ensuring that all important information is fully disclosed.

b. Digging Deeper From the perspective of a potential creditor, discuss the importance of proper classification of Eastwood?s Construction in Process account.

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Eastwood Inc. Trial Balance December 31, 2020 Credits Debits $ 41,000 Cash Accounts receivable 163,500 Allowance for doubtful accounts 8,700 Prepaid insurance Inventory FV-OCI investments Land Construction in process Intangible assets-patents Equipment Accumulated depreciation-equipment Accounts payable Income tax payable Notes payable Bonds payable Common shares 5,900 208,500 339,000 85,000 124,000 36,000 400,000 240,000 148,000 49,200 94,000 180,000 500,000 Accumulated other comprehensive income Retained earnings 45,000 138,000 $1,402,900 $1,402,900