Question

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.

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