On Page 2 is information related to Sunny Corp., a sales corporation, at December 31, 20X2 (unless otherwise noted). All accounts/items are "before tax." Hint: **use two chart of accounts spreadsheets as guidance for the format of the financial statements and for the classifications of accounts/items.***

Directions: Part 1: On Page 2, write the appropriate financial statement section code for each of the 44 total accounts/itemsin the blanks. Each financial statement section code is listed below and each code is used at least once.

Part 2: On Page 3, using accounts/items from Page 2 creat a condensed multiple-step income statement for Sunny Corp. for the year ended December 31, 20X2, according to GAAP format and terminology. Round all earnings per share figures to the nearest cent. Assume 32,000 preferred stock shares and 26,000 common stock shares are outstanding for the all of 20X2and a 25% income tax rate for both 20X1 and 20X2. Note that not all lines may be needed.

Part 3: On Page 4, using the accounts/items from Page 2 and the income statement on Page 3 creat a retained earnings statement for Sunny Corp. for the year ended December 31, 20X2, according to GAAP format and terminology. Note that not all lines may be needed.

Part 4: On Page 5, using the accounts/items from Page 2 and the retained earnings statement on Page 4 creat a classified balance sheet for Sunny Corp. at December 31, 20X2, according to GAAP format and terminology. Assume the company's operating cycle is one year. Please prepare the balance sheet in a "condensed" format except for the current assets, property plant and equipment, and stockholders' equity sections that need to be filled out completely. Note that not all lines may be needed.

Part 5: On Page 7, please read the directions for preparing the cash flows statement for a different company. Page (1)

Section Code	Account	Amount
	Dividends-common stock	$ 6,300
	Oil deposit	26,500
	Sales commissions expense	2,300
	Additional paid-in capital-common stock	13,100
	Retained earnings (beginning balance at January 1, 20X2)	27,275
	Loss on sale of investments	21,700
	Cash surrender value of life insurance (long-term)	40,400
	Payroll tax payable	13,400
	Bonds payable (matures July 20X7)	57,000
	Accounts receivable	36,700
	Deferred income tax asset	12,900
	Cost of goods sold	336,000
	Advertising expense	4,200
	Equity investments (to be held until 20X5)	13,800
	Common stock ($2 par value, 26,000 shares outstanding)	52,000
	Office salaries expense	30,600
	Treasury stock	25,500
	Interest revenue	7,100
	Cash	34,200
	Debt investments (matures March 20X3)	41,300
	Sales revenue	816,700
	Utilities expense	3,700
	Correction for understated revenues in 20X1	14,400
	Accounts payable	9,800
	Trademarks	27,200
	Bad debt expense	900
	Accumulated depreciation-buildings	86,300
	Gain on disposal of discontinued operations	43,600
	Notes payable (due in 10 months)	18,100
	Shipping expense	25,600
	Supplies	20,000
	Pension fund	27,900
	Product warranties (amounts expected for 20X3)	3,300
	Dividends-preferred stock	13,500
	Allowance for doubtful accounts	2,400
	Land (held for sale)	47,400
	Buildings	274,500
	Inventory	50,100
	Interest expense	4,600
	Depreciation expense	21,200
	Preferred stock ($3 par value, 32,000 shares outstanding)	96,000
	Premium on bonds payable (matures July 20X7)	3,900
	Sales discounts	17,900
	Dividends payable	5,800
		Page (2)

Sunny Corp

Income Statement

For the year ended Dec. 31, 20X2. Page3

Sunny Corp.
Retained Earnings Statement
For the year ended Dec. 31, 20X2
		Page4

Sunny Corp.
Balance Sheet
Dec. 31, 20X2		Page 5

Sales Sales revenue $3,053,081 Less: Sales discounts $ 24,241 Sales returns and allowances 56,427 80,668 Multiple-Step Net sales revenue 2,972,413 Cost of goods sold 1,982,541 Gross profit 989,872 Operating Expenses Selling expenses CABRERA COMPANY Sales salaries and commissions $202,644 Sales office salaries 59,200 Income Statement Travel and entertainment 48,940 For The Year Ended December 31, 2020 Advertising expense 38,315 Freight and transportation-out 41,209 Shipping supplies and expense 24,712 Postage and stationery 16,788 Telephone and Internet expense 12,215 Depreciation of sales equipment 9,005 453,028 Administrative expenses Officers' salaries 186,000 1. Operating Section Office salaries 61,200 Legal and professional services 23,721 Utilities expense 23,275 Insurance expense 17,029 Depreciation of building 18,059 Depreciation of office equipment 16,000 Stationery, supplies, and postage 2,875 Miscellaneous office expenses 2,612 350,771 803,799 Income from operations 186,073 Other Revenues and Gains 2. Nonoperating Dividend revenue 98,500 Rent revenue 72,910 171,410 Section 357,483 Other Expenses and Losses Interest on bonds and notes 126,060 Income before income tax 231,423 3. Income tax Income tax 66,934 Net income for the year $ 164,489 Earnings per common share $1.74 LO 2Cabrera Company Income Statement For the Year Ended December 31, 2020 Net sales $2,972,413 Cost of goods sold 1,982,541 Gross profit 989,872 Selling expenses (see Note D) $453,028 Ad ministrative expenses 350,771 803,799 Income from operations 186,073 Other revenues and gains 171,410 357,483 Other expenses and losses 126,060 Income before income tax 231,423 Income tax 66,934 Net income for the year $ 164,489 Earnings per common share $1.74 Scientic Products, Inc. Balance Sheet December 31, 2020 Assets Current assets Cash Investments (available-for-sale) Accounts receivable $165,824 Less: Allowance for dou btful accounts 1,850 Notes receivable Inventoriesat average-cost Supplies on hand Prepaid expenses Total current assets Long-term investments Equity investments Property, plant, and equipment Landat cost Buildingsat cost 975,800 Less: Accumulated depreciation 341,200 Total property, plant, and equipment Intangible assets Goodwill Total assets 3 42,485 28,250 163,974 23,000 489,713 9,780 16,252 125,000 634,600 $ 773,454 87,500 759,600 100,000 $1,720,554