Notes \& extra information provided to you from discussions with the Junior Accountant: 1. The cash balance shown on the financial statements includes a $35,000 overdraft in the payroll account. 2. Accounts receivable includes a provision of $85,000 for uncollectible accounts. 3. Management is holding the FVOCl investments for strategic reasons, and as such does not plan on selling the investments in the near future. 4. A few years ago the corporation acquired land and building for $500,000 and $350,000 respectively. The total amount of depreciation recorded on the building as year-end is $70,000. 5. The bonds are 5-year bonds which have been acquired at a premium during the year. The bonds will be held to maturity. 6. The bank loan is an interest-bearing instalment loan secured by land and the building. The loan principal to be repaid over the next 12 months is $125,000. 7. During the year, the company issued refunds to customers for inventory returns in the amount of $60,000. Also, a total of $4,550 in sales discounts were provided to credit customers for early payment. Both these amounts are included in sales revenues. 8. The company successfully received $14,150 in supplier rebates on inventory purchases and recorded these as extra revenues in the income statement. 9. When inventory was purchased, SWI paid $13,500 was spent on freight to have the inventory shipped to its warehouses. The remaining freight charges related to shipping costs for SWI's largest customers. 10. Included in this balance is $6,500 of amortization for the trademark. 11. SWI declared and paid cash dividends of $90,000 during the year. Correcting the Financial Statements 3. Prepare a corrected classified statement of financial position (balance sheet). [25 marks] 4. Prepare a corrected multi-step income statement. [30 marks] Hint: When preparing corrected financial statements, ensure all proper terminology is being used. Correct for any errors you identify with respect to valuation, recognition, and/or classification. Be sure to consider all information provided to you. This includes information in the case "introduction" as well as the extra information provided to you by the junior accountant (summarized in the "notes" following the financial statements). Subsequent Information 5. The junior accountant identified that the spreadsheet used to calculate depreciation on capital assets was set up incorrectly. The formulas used to calculate depreciation expense didn't deduct estimated residual values and this mistake occurred in the current and the prior years. Briefly explain how the junior accountant should deal with this situation and the impact it will have on the financial statements. [5 marks]