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TIDAL CORP. has the following account balances and additional information at December 31, 2020. The company is a private corporation and follows ASPE:
Machinery$ 1,540,000
Accounts receivable................................................................................................. 102,000
Accrued interest payable.............................................................................................. 1,000
Investment Income....................................................................................................... 9,000
Sales......................................................................................................................... 800,000
Accounts payable........................................................................................................ 30,000
Loss from Flood (net of $7,000 tax)............................................................................... 21,000
Selling expenses......................................................................................................... 64,000
Common shares (40,000 issued; no change during 2020)...................................... 200,000
Accumulated depreciation.......................................................................................... 90,000
Long-term note payable (due Oct 1, 2024).............................................................. 100,000
Inventory, Jan 1, 2020................................................................................................ 76,000
Inventory, Dec 31, 2020.............................................................................................. 62,500
Supplies inventory...................................................................................................... 40,000
Unearned service revenue........................................................................................... 3,000
Land.......................................................................................................................... 370,000
Cash............................................................................................................................ 60,000
FV-NI Investments (at fair value).............................................................................. 100,000
Retained earnings, Jan 1, 2020................................................................................ 135,000
Interest expense........................................................................................................... 8,500
Correction of an error from a prior period (net of $6,000 tax)................................. (18,000)
General and administrative expenses........................................................................ 80,000
Dividends declared and not paid................................................................................ 15,000
Allowance for doubtful accounts................................................................................... 5,000
Vehicles ........................................................................................ 225,000
Cost of Goods Sold. 364,500
Unless indicated otherwise, you may assume a 20% income tax rate.
General and administrative expenses include depreciation.
Instructions
a. Prepare, in good form, a multiple-step income statement.
b. Prepare, in good form, a retained earnings statement.
Answer & Explanation
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