Adjusted Trial Balance

December 31,2020

Cash 412,789

Accounts Receivable 50,000

Inventory 350,000

Prepaid Insurance 42,000

Short-term Investments 53,000

Plant, Property & Equipment 2,440,000

Accumulated Depreciation 244,000

Right of Use Asset 60,000

Patent 13,500

Accounts Payable 30,000

Income Tax Payable 88,500

Bonds Payable 300,000

Lease Liability 43,355

Discount on Bonds Payable 10,000

Common Stock $1 par 500,000

Paid-In Capital in Excess of Par, Common Stock 1,655,000

Retained Earnings 0

Sales Revenue 8,721,685

Dividends Declared 15,000

Gain on Sale of Short-term Investments 6,750

Cost of Goods Sold 4,675,750

Depreciation Expense 244,000

Income Tax Expense 335,000

Insurance Expense 42,000

Interest Expense 26,500

Salary Expense 2,370,013

Utilities Expense 449,738

Totals $ 11,589,290 $ 11,589,290

Additional Information:

This year (2020) was the company's first year of operations.

Accounts payable relate only to purchases of inventory. All sales were made on account.

The bonds payable are five-year, 8% bonds that were issued January 1, 2020, for $287,500. The discount is being amortized by the straight-line method.

A two-year insurance policy was acquired on January 1, 2020.

The short-term investments are all investments in equity securities; cost equals market value.

Short-term investments that were purchased for $30,000 were sold for cash on December 1.

Purchases of Property, Plant, and Equipment were paid with cash.

The Right of Use asset relates to equipment that Client leased on December 31, 2020 on a 5-year Finance Lease

The annual lease payment of $16,645 is due on december 31 of each year. The first payment was made December 31, 2020

As of December 31, 2020 the current portion of the Lease liability is $11,442

Using the trial balance on page and the additional information provided above, prepare the following financial statements for Client Corporation:

A) An Income Statement for the year ending December 31, 2020. Use the multiple-step format, and be sure to include appropriate per-share disclosures

B) A Statement of Retained Earnings for the year ending December 31, 2020.

C ) A classified Balance Sheet as of December 31, 2020.

8.5.2