The following statement of financial position was prepared by Bob, the recently hired and inexperienced bookkeeper for Beaumont Developments Inc.

\begin{array} { | l | r | r | r | } \hline{ \text { Beaumont Developments Inc } } \\\hline { \text { Statement of Financial Position } } \\\hline \text { as of December 31, 20X7 } & & \text { Accounts payable } ^ { 7 } &\$15,000 \\\hline \text { Cash } ^ { 1 } &\$ 40,000 & \text { Long-term liabilities } ^ { 8 } & 170,000 \\\hline \text { Accounts receivable } ^ { 2 } & 52,200 & \text { Shareholders' equity } ^ { 9 } & 208,500\\\hline \text { Inventories } ^ { 3 } & 57,000& & \\\hline \text { Investments } ^ { 4 } & 76,300 & & \\ \hline \begin{array} { l } \text { Property, plant \& } \\\text { equipment (net) }^ { 5 }\end{array} & 136,000& & \\\hline \text { Patents } ^ { 6 } &\underline { 32,000 } \\\hline & \$ 393,500 &&\$393,500 \\\hline & & & \\\hline\end{array}

The following additional information is provided:
1. Cash includes the cash value of a life insurance policy $9,400, and Bob found a utilities bill for $1,500 in his in-box, so he deducted the amount from cash.
2. The accounts receivable balance includes an amount of $2,300 owing from a customer who has since gone out of business. The company does not expect to receive any further payments on this debt. The company writes off bad debts as they occur. Bob also included the account prepaid expenses with accounts receivable on the statement, as explained in point 6 below.
3. Inventories do not include goods costing $5,000 held on consignment at Hardy Home Emporium. Receivables and sales of $5,000 were recorded for these goods.
4. Investments include investments in trading shares $4,000 and long-term bonds $43,300 , a patent $32,000 and franchises $9,000. The company accounts for unrealized gains and losses on investments in other comprehensive income. The patent is for a manufacturing process that is now obsolete and is no longer used.
5. Property plant and equipment (PPE) has a remaining useful life of eight years, and includes a new machine purchased during the year for $26,000, which has a useful life of 10 years. Bob does not know what "net" means, but he used the same accounts and followed the same format as last year to prepare the statement. Accumulated depreciation has the same balance as last year, $68,000. The company uses the straight-line method of depreciation. Also, included in PPE are a patent with an original cost of $32,000, which was obtained twelve years ago and is now obsolete, and franchises in the amount of $9,000.
6. Insurance premiums of $18,000 were paid during the year . The insurance policy runs from April 1 to March 31 of the following year. Last year the premium paid was $14,880. The previous bookkeeper had debited the account called prepaid insurance in the amount of $3,720. Bob was not con?dent this was correct, so he charged this year's premium as insurance expense and he included the prepaid expense amount of $3,720 in accounts receivable.
7. Accounts payable includes the account wages payable for $2,300. The amount has not changed since last year. The last pay in the current year was on December 28 for hours worked up to that date. The company incurs wage expenses of $500 per day.
8. Long-term liabilities include a bank loan of $60,000 and a mortgage payable of $110 ,000.
9. Shareholder's equity consists of the following items:

\begin{array} { | l | r | } \hline \text { Common shares outstanding } ( 20,000 \text { shares } ) & \$ 40,000 \\\hline \text { Accumulated other comprehensive income } & \$ 11,600 \\\hline \text { Retained earnings } & \$ 156,900 \\\hline\end{array}

Required: After making all necessary adjustments, prepare a classified S tatement of Financial Position in good form. What is the effect of your adjustments on earnings per share ?

Which Is the Correct Order of the Steps in the Accounting

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