Question

Presented is the adjusted trial balance of Scott Butler Corporation at December 31, 2020. Debit Credit...

Presented is the adjusted trial balance of Scott Butler Corporation at December 31, 2020.

Debit

Credit

Cash

$    197,000

Trading Debt Securities (fair value, $153,000)

145,000

Fair Value Adjustment – Trading Debt Securities

8,000

Accounts Receivable

435,000

Allowance for Doubtful Accounts

$    25,000

Inventory (net realizable value, $600,000)

597,000

Available-for-sale Equity Securities (fair value, $278,000)

266,000

Fair Value Adjustment – Available-for-sale Equity Securities

12,000

Held-to-maturity Debt Securities (fair value, $296,000)

299,000

Equipment

600,000

Accumulated Depreciation – Equipment

60,000

Buildings

1,040,000

Accumulated Depreciation – Buildings

152,000

Land

280,000

Patents, (net of accumulated amortization)

195,000

Franchises (net of accumulated amortization)

160,000

Notes Payable - Chase

90,000

Accounts Payable

136,000

Pension Liability

455,000

Accrued Liabilities

96,000

Notes Payable - Mellon

1,000,000

Bonds Payable

920,000

Discount on Bonds Payable

193,000

Deferred Income Tax Liability

3,000

Common Stock

1,000,000

Paid-in Capital in Excess of Par Value

80,000

Treasury Stock

19,000

Retained Earnings

115,000

Dividends

27,000

Sales

8,100,000

Cost of Goods Sold

4,800,000

Selling Expenses

2,000,000

Administrative Expenses

950,000

Dividend Revenue

124,000

Interest Expense

218,000

Unrealized Holding Gain on Trading Securities – Income

8,000

Unrealized Holding Gain on AFS Securities – Equity

12,000

Interest Revenue

87,000

Gain on Sale of Intangible Assets

63,000

Income Tax Expense

82,000

Deferred Income Tax Expense

3,000

        Total

$ 12,526,000

$ 12,526,000

Additional information:

  1. The notes payable to Chase is short-term.
  2. The notes payable to Mellon is long-term.
  3. The company’s bonds are due in 5 years.
  4. Of the company’s $5 par value common stock, there are 1,000,000 shares authorized, 200,000 shares issued, and 159,000 shares outstanding.
  5. The company did not issue or buy back any stock during the year.

Prepare a classified balance sheet.

Prepare a statement of comprehensive income. Round EPS to 2 decimal places.

Prepare a statement of stockholders’ equity.

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Answer #1
Income Statement
Continuing operations
Sales 8100000
Cost of Goods Sold -4800000
Gross Profit 3300000
Selling Expenses -2000000
Administrative Expenses -950000
Other income
Dividend revenue 124000
Other gains-net
Gain on Sale of Intangible Assets 63000
Operating profit 537000
Finance income 87000
Finance costs 218000
Finance costs-net -131000
Profit before income tax 406000
Income tax expense -82000
Deferred tax expense -3000
Profit from continuing operations 321000
Earning per share 2.02
Consolidated statement of comprehensive income
Profit for the period 321000
Other comprehensive income
Unrealized Holding Gain on Trading Securities – Income 8000
Unrealized Holding Gain on AFS Securities – Equity 12000
Other comprehensive income-net 20000
Total comprehensive income for the period 341000
Earning per share 2.14
Consolidated Balancesheet
Non-current assets
Propoerty, plant and equipment 17,08,000
Investment properties 0
Intangible assets 3,55,000
Deferred assets 0
Other assets
Investment accounted for using the equity method
Financial assets at fair value through other comprehensive income 4,31,000
Financial assets at fair value through profit and loss
Financial assets at amortised costs
Derivative financial instruments 299000
Held-to maturity investments
Available for sale financial assets
other loans and recivables
Total non-current assets 27,93,000
Current assets
Inventories 5,97,000
Other current assets
Contract assets
Trade receivables 4,10,000
Other financial assets at amortised costs
Other receivables
Derivative financial instruments
Financial assets at fair value through profit and loss
Cash and cash equivalents 197000
Total current assets 12,04,000
Total assets 39,97,000
Liabilities
Non-current liabilities
Borrowings 17,27,000
Deferred tax liability 3,000
Employee benefit obligation
Provisions
Total non-current liabilities 17,30,000
Current liabilities
Trade and other payables 6,87,000
Contract liabilities
Current tax liability
Borrowings 90000
Derivative financial instruments
Employee benefit obligation
Provisions
Total current liabilities 7,77,000
Total liabilities 25,07,000
Net assets 14,90,000
Equity
Share capital and share premium 10,61,000
Other equity
Other reserve 20000
Reatined earnings 409000
Capital and other reserves attributable to owners'
Non-controliing interest
Total equity 14,90,000
Cost Accumulated depreciation Total
Land 280000 2,80,000
Equipment 600000 60,000 5,40,000
Building 1040000 1,52,000 8,88,000
Total 1920000 212000 17,08,000
Intangible assets
Patents, (net of accumulated amortization) 1,95,000
Franchises (net of accumulated amortization) 1,60,000
3,55,000
Financial assets at fair value through other comprehensive income
Trading Debt Securities (fair value, $153,000) 1,45,000
Available-for-sale Equity Securities (fair value, $278,000) 2,66,000
Other comprehensive income 20,000
4,31,000
Trade and other payables
Accounts Payable 1,36,000
Pension Liability 4,55,000
Accrued Liabilities 96,000
6,87,000
Borrowings
Notes Payable - Mellon 10,00,000
Bonds Payable 9,20,000
Discount on Bonds Payable -1,93,000
17,27,000
Retained earnings
Beginning balance 115000
Income 321000
Dividends -27000
Ending balance 409000
Share capital No of shares Par value Premium Total
Opening 200000 1000000 80000 1080000
Trasury stock 41000 -19000
Total 1061000
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