The trial balance of Eastwood Inc. and other related information for the year 2017 follows: Additional information:

Question:

The trial balance of Eastwood Inc. and other related information for the year 2017 follows:

Additional information:
1. The inventory has a net realizable value of $212,000. The FIFO method of inventory valuation is used.
2. The fair value-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, 2029.
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 2018.
7. The notes payable represent bank loans that are secured by fair value-OCI investments carried at $120,000. These bank loans are due in 2018.
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, 2017, ensuring that all important information is fully disclosed.
(b) From the perspective of a potential creditor, discuss the importance of proper classification of Eastwood's Construction in Progress account.

Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...