Flounder Inc. follows IFRS and is adjusting and correcting its books at the end of 2020. In reviewing its records, the following information has been compiled: 1. In 2020, the depreciation method on plant assets should be changed from sum-of-the-years'-digits to the straight-line method due to a change in pattern of usage. The assets were purchased at the beginning of 2019 for $79,200 with an estimated useful life of four years and no residual value. Flounder has already recorded 2020 depreciation expense of $23,760 related to the assets, using the sum-of-the-years'-digits method. 2. Ending inventory for 2019 was overstated by $17,600; ending inventory for 2020 is correctly stated. 3. The adjusted trial balance at December 31, 2018, includes the following amounts: Cash $33,440; Inventory $98,560; Accounts Payable $42,240; Retained Earnings $63,360. 4. Dividends of $26,400 and $22,000 were declared and paid on December 31, 2020, and December 31, 2019, respectively. 5. Share capital of $26,400 consists of 17,600 common shares outstanding since the company's inception. Flounder's statement of financial position and income statement are as follows at December 31, 2019 and 2020, before any corrections related to the information above. The December 31, 2020 statements are in draft form only and the 2020 accounts have not yet been closed. FLOUNDER INC. Statement of Financial Position As at December 31, 2020 Assets 2020 2019 Cash $52,800 $29,920 Inventory 94,160 112,640 Plant assets, net 23,760 47,520 Total assets $170,720 $190,080 Liabilities and Shareholders' Equity Accounts payable $14,960 $53,680 Share capital 26,400 26,400 Retained earnings 129,360 110,000 Total liabilities and shareholders' equity $170,720 $190,080 FLOUNDER INC. Income Statement Year Ended December 31, 2020 2020 2019 Sales $299,200 $237,600 Cost of goods sold 176,000 124,960 Gross profit 123,200 112,640 Operating expenses 77,440 44,000 Net income $45,760 $68,640 Prepare the comparative income statement for 2020. (Round earnings per share to 2 decimal places, e.g. 52.75.) FLOUNDER INC. Income Statement For the Years Ended December 31 2019 Restated see note XX 2020 Sales $ 299200 237600 Cost of Goods Sold 158400 142560 Gross Profit 140800 95040 Operating Expenses 73480 32120 Net Income /(Loss) $ 67320 $ 62920 Earnings per Share $ 3.83 $ 3.58 Prepare the comparative statement of changes in equity for 2020. (Do not leave any answer field blank. Enter O for amounts. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) FLOUNDER INC. Statement of Changes in Equity For the Year Ended December 31, 2020 Share Capital Retained Earnings Balance, January 1, 2019 $ $ Add > v : $ $ Statement of Financial Position As at December 31, 2019 Restated see note XX As at December 31, 2020 As at January 1, 2019 Assets Cash $ $ Inventory Plant Assets, Net $ $ $ Liabilities and Shareholders' Equity Accounts Payable V $ $ ta Share Capital Retained Earnings $
