Additional information:

here is a prior period adjustment to retained earnings of $20. See additional information #6 on the assignment. You should adjust the beginning balance to $388 and add $20 to the Cash paid for income taxes.

Depreciation expense is included in the Selling & Administrative Expenses total of $456. You will need to calculate depreciation expense and then back it out of the S&A expenses. To calculate Cash paid for operating expenses you will need to take the S&A expenses minus the depreciation expense and relate it to the changes in the Accrued Expenses account on the balance sheet.

Presented below are the balance sheets of Trout Corporation as of December 31, Year 1 and Year 2, and the income statement for the year ended December 31, Year 2. The statement of retained earnings for the year ended December 31, Year 2 is on the next page. All dollars are in thousands. Trout Corporation Balance Sheets December 31, Year 1 and Year 2 Year 1 Year 2 Cash Treasury Bills & Commercial Paper Accounts Receivable, net Inventories Land Plant and Equipment Accumulated Depreciation Total Assets $204 143 495 780 250 900 (170) $2,602 $403 106 695 895 350 1,398 (295) $3,552 Liabilities & Stockholders' Equity Accounts Payable Dividends Payable Accrued Liabilities Notes Payable, Long-Term Bonds Payable Bond Discount Common Stock, Par Value $20 Additional Paid-In Capital Retained Earnings Total Liabilities & Stockholders' Equity $700 -168 -500 (18) 600 244 408 $2,602 $650 10 413 450 500 (16) 640 304 601 $3,552 Assets Trout Corporation Income Statement For the Year Ended December 31, Year 2 Net Sales Revenue Operating Expenses: Cost of Goods Selling & Administrative Expenses Operating Income Other Income (Expense): Interest Expense Gain on Sale of Equipment $2,000 $1,126 456 $(80) 5 1,582 $418 (75) Pre-Tax Income from Continuing Operations Less: Income Tax Expense: Net Income $343 90 $253 Trout Corporation Statement of Retained Earnings For the Year Ended December 31, Year 2 Retained Earnings as of January 1, Year 2 Add: Net Income Deduct: Dividend Declared, October 10, Year 2 Retained Earnings, December 31, Year 2 $388 $ 253 (40) 213 $601 Additional Information: 1. On April 15, Year 2, Trout issued 2 shares of its common stock for land having a fair value of $100. 2. On May 25, Year 2, Trout borrowed money from an insurance company. The underlying promissory note bears interest at 15% and is payable in three equal annual installments of $150. The first payment is due on May 25, Year 3. 3. On July 1, Year 2, Trout sold equipment costing $52 for $33 cash. 4. On October 10, Year 2, Trout declared a cash dividend of $40 on its common stock. 5. The Selling and Administrative Expense account includes Depreciation Expense