Question

FINANCIAL STATEMENT PROJECT #5 Below is the trial balance of Saturn Corporation on December 31, 2019. The accounts are listed in alphabetical order and all accounts have normal balances. Account Title: Account Title: Balance: Balance: 1,660 Interest Expense Interest Payable Accounts Payable Accounts Receivable 560 2,580 80 Accum. Amort. - Copyright 420 Interest Receivable 10 Accum. Amort. - Patent Accum. Depl. - Gold Mine Accum. Depr. - Bldngs. Accum. Depr. - Equip. Adjustment to Market (debit balance) Administrative Expenses Interest Revenue 390 90 Land 4,300 5,000 Long-Term Investment in Bonds Long-Term Investment in Subsidiary 3.600 4,400 12,600 1,320 Loss on Sale of AFS Sec. 260 260 2 840 2,840 7,800 Marketable Securities* 1 390 Merchandise Inventory Allowance for Bad Debts 500 1,390 Mortgage Note Payable (30-year) Notes Receivable (short-term) APIC-Common 2,200 18,000 APIC-Preferred ADIG APIC-Treasury Bonds Payable (15 year) 1,200 1,260 5,000 1,400 300 Patent 22,500 Preferred Stock Prepaid Insurance Rental Revenue Retained Earnings Salaries Payable Buildings 32.500 990 7 120 7,120 Cash 250 Cash Dividends Declared Common Stock Common Stock Dividend Distributable 8,290 700 12,000 560 53.800 Sales 900 Сорупight Cost of Goods Sold 880 Sales Discounts 820 1 460 26,200 Sales Returns & Allowances 1,460 12,700 Discount on Bonds Payable 1,400 Selling Expenses Short-Term Notes Payable SIT Payable Dividend Revenue 60 950 Dividends Payable 250 160 Equipment FICA Taxes Payable 6,600 Stock Dividends Declared 400 Subsidiary Income 140 1,180 Supplies uppies SUTA Taxes Payable FIT Payable FUTA Taxes Payable 330 610 20 60 Treasury Stock Unealized Gain on Valuation of MS (Debt) Gain on Disposal of Plant Assets 120 950 Gold Mine 7,100 440 Income Tax Expense Income Tax Payable 1,080 Unrealized Loss Valuation of MS (Equity) 180 280 Unearned Rental Revenue 300 *short-term bond investments included in Marketable Securities are classified as Available for Sale Securities REQUIRED: Prepare the financial statements for the year for Saturn Corporation--a multi-step income statement, a statement of retained earnings and a classified balance sheet. What is different for this project compared to Project #4? New Accounts: 1. Chapter 10: Bonds Payable is a long-term liability account Premium on Bonds Payable and Discount on Bonds Payable are an adjunct and contra account TO the Bonds Payable account Mortgages Payable is a long-term liability account Chapter 12: Marketable Securities is a current asset. Adjustment to Market accounts are either an adjunct (debit balance) OR a contra (credit balance) to the Marketable Securities account. Losses and Gains on Sales of investment assets are realized gains and losses on the income statement Unrealized Losses and Gains on investment assets are on the income statement if the investments are trading securities and are on the stockholders' equity section of the balance sheet if the investments are available for sale securities (as either a contra or adjunct account to the total of paid in capital and retained earnings) Long-Term Investments in Bonds are long-term investments Long-Term Investments in Subsidiary Company (under the equity method) are long-term investments Subsidiary Income (our share of subsidiary net income under the equity method) is on the income statement Dividend Revenue is on the income statement Classified Balance Sheet: 2. We will now have FOUR asset categories: current, plant, intangible, and long-term investments

Answer 1

Saturn Corporation
Trial balance
As at Dec 31, 2019	Debit	Credit
Cash	7120
Accounts receivable	2580
Allowance for B/d		500
Interest receivable	10
Merchandise Inventory	1390
Supplies	610
Notes receivable-short-term	1200
Prepaid Insurance	990
Marketable securities	2840
Adjustment to market	260
Land	5000
Bldg.	32500
Acc. Dep.-bldg.		3600
Equip.	6600
Acc. Dep.-eqpt.		1320
Gold mine	7100
Acc. Dep.-Gold mine		4300
Patent	1260
Acc. Amort.Patent		390
Copyright	880
Acc. Amort.Copyright		420
LT inv. In bonds	4400
LT inv. In subs.	12600
Accounts payable		1660
Commmon stock div. distrbutable		900
Diidends payable		250
FICA taxes payable		140
FIT payable		330
FUTA taxes payable		20
Income tax payable		280
Interest payable		80
Salaries payable		560
Short-term Notes Payable		950
SIT payable		160
SUTA taxes payable		60
Unearned rental revenue		300
Bonds payable(15 yrs.)		22500
Discount on B/P	1400
Mortgage Note payable(30 yrs.)		18000
Common stock		12000
APIC-Common		2200
APIC-Preferred		1400
APIC-Treasury		300
Preferred stock		5000
Treasury stock	950
Unreal.gain on val.(MS-debt)		440
Unreal.loss on val.(MS-equity)	180
Retained earnings		8290
Sales		53800
sales discounts	820
sales Retutns & allowances	1460
COGS	26200
Admn. Exp.	7800
Sell. Exp.	12700
Susbsidiary income		1180
Rental revenue		250
Loss on sale of AFS	260
Interest revenue		90
Gain on disposal of pl.assets		120
Interest exp.	560
Income tax exp.	1080
Cash div. decl.	700
Div. revenue		60
stock div. decl.	400
Total	141850	141850

Saturn Corporation
Muti-step Income Statement
Sales	53800
Sales dicounts	-820
Sales returns& allowances	-1460
Net sales		51520
Cost of Goods sold		26200
Gross profit		25320
Less: Operating expenses:
Administrative expense	7800
Selling expenses	12700
Rental revenues	-250
Gain on disposal of plant assets	-120	20130
Operating income		5190
Non-operating (expense)/Income
Interest expense	-560
Dividend revenue	60
Interest revenue	90
Loss on sale of AFS	-260
Subsidiary income	1180	510
Income before tax		5700
Income tax expense		1080
Net income		4620

Statement of Retained Earnings
Beginning balance	8290
Net income	4620
Cash dividends declared	-700
Stock dividend declared	-400
Ending balance	11810

Classified Balance Sheet
Assets
Cash		7120
Accounts Receivable	2580
Allowance for bad debts	-500	2080
Merchandise inventory		1390
Supplies		610
Notes Receivable(short-term)		1200
Prepaid Insurance		990
Marketable securities	2840
Add: Adjust to market	260	3100
Interest receivable		10
Total current assets			16500
Fixed assets
Plant assets
Land		5000
Gold mine	7100
Less: Accum. Depl.-Gold mine	-4300	2800
Buildings	32500
Less: Accum. Depr.-Building	-3600	28900
Equipment	6600
Less: Accum. Depr.-equipment	-1320	5280
Total Plant assets			41980
Intangible assets
Copyright	880
Less: Accum. Amrtsn.-Copyright	-420	460
Patent	1260
Less: Accum. Amrtsn.-Patent	-390	870
Total Intangible assets			1330
Long-term Investments
Long-term inv. In bonds		4400
Long-term inv. In Subsidiary		12600	17000
Total assets			76810
Liabilities & stockholders'equity
Liabilities
Current Liabilities
Accounts payable		1660
FICA taxes payable		140
FIT payable		330
FUTA taxes payable		20
SUTA taxes payable		60
Income tax payable		280
Interest payable		80
Salaries payable		560
SIT payable		160
Short-term note payable		950
Unearned rental revenue		300
Common stock dividends distributable		900
Dividends payable		250
Total current liabilities			5690
Long-term liabilities
Bonds payable(15 Year)	22500
Less: Discounts on Bonds payable	-1400	21100
Mortgage Note payable(30-Year)		18000
Total Long-term liabilities			39100
Stockholders'equity
Common stock	12000
APIC-Common stock	2200	14200
Preferred stock	5000
APIC-Preferred stock	1400	6400
APIC-Treasury		300
Treasury stock		-950
Retained Earnings		11810
OCI:
Unrealised gain on valuation of MS(debt)	440
Unrealised loss on valuation of MS(equity)	-180	260
Total Stockholders'equity			32020
Total Liabilities & stockholders'equity			76810