Question

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Problem 2 (25%) Norris Corporation's capital structure consists solely of have been authorized. At 12/31/19, an analysis of the a discussions with company officials revealed the following information de capital structure consists solely of shares of common stock, 50.000 shares A+ 12/31/19, an analysis of the accounts on the adjusted trial balance and Accounts payable Accounts receivable Accrued interest payable Accumulated depreciation Additional paid-in capital Allowance for doubtful accounts Bonds payable (maturity 7/1/24) Bond sinking fund Cash Common stock, $10 par Cost of goods sold Dividend revenue Dividends declared Error in 2017 depreciation, taken in excess General and administrative expenses 43.400 135,000 1,500 270,000 470,000 7,500 300,000 33.000 30,000 200,000 976,500 12,000 43,500 60,000 225,000 25,500 187,500 555,000 90,000 675,000 60,000 60,000 150,000 435,000 1,650,000 192,000 16,600 28,000 Interest expense Inventory Land Loss on sale of assets from discontinued business segment, net of tax Machinery and equipment Marketable securities Materials and supplies Patents Retained earnings, 1/1/19 Sales Selling expenses Unearned service revenue Unrealized holding loss on available for sale securities, net of tax The following information is also available:

Answer 1

Norris Corporation
Income Statement
For the year 2019
Particulars	Amount	Amount
Sales		1,650,000
Cost of Goods Sold		-976,500
Gross Profit		673,500
Operating expenses
Materials and supplies		-60,000
Selling expenses		-192,000
General and admin expenses		-175,000
Bad debt expense		-10,000
Total Operating expenses		-437,000
Opertaing Income before unusual items and taxation		236,500
Loss due to employee strike in november		-50,000
Operating Income before taxation		186,500
Non operating or others
Dividend Revenue		12,000
Interest expense		-25,500
Non Operating Income/ (Loss)		-13,500
Income from Continuing Operations before tax		173,000
Income tax @30%		-51,900
Income from Continuing Operations		121,100
Loss on sale of asset from Disc operaions, net of tax		-63,000
Income/(loss) from discontinuing operations, net of tax		-63,000
Net Income		58,100
Dividend declared		43,500

Statement of OCI
Particulars	Amount	Amount
Unrealised holding loss on AFS, net of tax		-28,000

Retained earnings
Particulars	Amount	Amount
Opening Balance	435,000
Error in 2017 depreciation (add to opening retained earnings), net of tax	42,000
		477,000
Current year income		58,100
Dividend declared		-43,500
Other Comprehensive Income		-28,000
Retained earnings		463,600

Norris Corporation
Balance Sheet
For the year ended 12/31/19
Particulars	Amount	Amount
ASSETS
Current assets
Cash and cash equivalents		30,000
Accounts receivables	135,000
Less: Allowance for doubtful debts	17,500	117,500
Inventories		187,500
Marketable Securities		60,000
Total current assets (A)		395,000
Fixed assets
Tangiable
Land		555,000
Machinery and equipment	675,000
Less: Accumulated Depreciaiton	210,000	465,000
Intangiable
Patents		150,000
Total non-current assets (B)		1,170,000
Total assets (A + B)		1,565,000
LIABILITIES AND EQUITY
Current liabilities
Accounts Payable		43,400
Tax Payable		36,900
Accrued interest Payable		1,500
Unearned service revenue		16,600
Total current liabilities ( C )		98,400
Long-term liabilities
Long-term bonds payable		300,000
Bonds Sinking fund		33,000
Total non-current liabilities (D)		333,000
Total liabilities (E = C + D)		431,400
Shareholders’ Equity
Capital
Common stock		200,000
Additional paid-in capital		470,000
Retained earnings		463,600
Total equity (F)		1,133,600
Total liabilities and equity (E + F)		1,565,000