Amana Cement Corporation is a private corporation controlled by Amin Amana. The company's adjusted trial balance and other related data at 31 December 20x5 are given below. Although the company uses some obsolete terminology, the amounts are correct. AMANA CEMENT CORPORATION Adjusted Trial Balance 31 December 20X5 Debit Balance Accounts Cash $ 30,900 Land (used for building site) 103,100 Cost of goods sold 119,900 Short-term securities, at market (cost, $32,000) 33,500 Investment in U.S. subsidiary 79,800 Goodwill 95,900 Merchandise inventory 23,200 Office supplies inventory 1,600 Patent 5,600 Operating expenses 44,000 Income tax expense 14,000 Impairment of patent 6,100 Prepaid insurance 960 Building (at cost) 160,100 Land (held for speculation) 80,300 Translation loss on U.S. subsidiary, 31 December 20X4 12,800 Accrued interest receivable 420 Accounts receivable (trade) 31,600 Note receivable, 10% (long-term investment) 41,700 Subscriber lists (net) 30,400 Prepayments to pension fund in advance of expensing (long- 35.900 term) Dividends declared in 20x5, payable in 2006 21,000 Correction of error from prior year-no income tax effect 21,000 $993,780 $993,780 Credit Balance Accounts Reserve for bad debts Accounts payable (trade) Revenues 20x5 translation gain on U.S. subsidiary Deferred Income tax Note payable (short term) Common shares, no par 10,000 shares outstanding Reserve for depreciation, building Retained earnings, 1 January 20X5 Gain on new accounting policy Accrued wages Cash advance from customer Accrued property taxes Note payable (long term) Rent revenue collected in advance Bonds payable, 11% ($20,000 due 1 June 20X6) $ 1,000 13,800 253100 14,800 46,900 11,800 167,100 88,300 136,680 36,900 1,900 2.900 900 18,000 1,700 198,000 $993,780 Additional information (no accounting errors are involved): a. Merchandise Inventory is based on FIFO, lower of cost or net realizable value, b. The patent is subjected to an annual impairment test. The impairment for 20x5 has already been recorded. c. Operating expenses as given include depreciation and interest expense and revenues include interest and investment revenues. d. The "cash advance from customer was for a special order that will not be completed and shipped until March 20X6; the sales price has not been definitely established because it is to be based on cost (no revenue should be recognized for 20x5). Additional information (no accounting errors are involved: a. Merchandise inventory is based on FIFO, lower of cost or het realizable value b. The patent is subjected to an annual impairment test. The impairment for 20x5 has already been recorded. Operating expenses as given include depreciation and interest expense, and revenues include interest and investment revenues. d. The cash advance from customer was for a special order that will not be completed and shipped until March 20x6: the sales price has not been definitely established because it is to be based on cost (no revenue should be recognized for 20x5). Required: 1. Prepare the income statement AMANA CEMENT CORPORATION Income utement Year ended 31 December 20X5 (Amounts in Canadian dollare) 5253.100 Haven Expenses Total expenses 5253.100 1-b. Compute EPS. (Round the answer to two decimal places.) EPS 2. Prepare the statement of retained earnings. (Negative and deductible amounts should be indicated by a minus sign.) AMANA CEMENT CORPORATION Statement of Changes in Retained Earnings Year Ended 31 December 20X5 (Amounts in Canadian dollars) Balance, 31 December 20X4 Adjustments Correction of error from 20x3 Change in accounting policy Restated balance, 1 January 20X4 Shareholders' equily, 31 December 20X5 3. Prepare the SFP. AMANA CEMENT CORPORATION Statement of Financial Position 31 December 20X5 Assets Current assets: Total current assets Noncurrent assets: Total assets Total assets Liabilities Current liabilities: Total current liabilities Noncurrent liabilities: Total noncurrent liabilities Total liabilities Shareholders' Equity Total liabilities and shareholders' equity
