Q1.

Presented below is information which relates to Cullumber Ltd., a Canadian private company.

Net loss		$ 126,000
Retained earnings, January 1, 2020		330,000
Cash dividends declared on common shares		50,000
Understatement of net income resulting from 2019 inventory error (pre-tax)		73,000

Prepare in good form, a statement of retained earnings for the year ended December 31, 2020. The tax rate is 30%. (List items that increase retained earnings first.)

Q2.

The following are selected ledger accounts of Sheffield Rose Corporation at December 31, 2020:

Cash		$ 182,000		Entertainment expense		$ 72,000
Inventory (as of Jan. 1, 2020)		540,000		Office expense		35,000
Sales revenue		4,300,000		Insurance expense		23,000
Unearned revenue		120,000		Advertising expense		56,000
Purchases		2,710,000		Freight out		92,000
Sales discounts		33,000		Depreciation expense of office equipment		52,000
Purchase discounts		26,000		Depreciation expense of sales equipment		36,000
Salaries and wages expense (sales)		280,000		Telephone and Internet expense (sales)		18,000
Salaries and wages expense (administrative)		340,000		Utilities expense (administrative)		32,000
Purchase returns and allowances		12,000		Miscellaneous expense		8,000
Sales returns and allowances		80,000		Rental revenue		240,000
Freight in		73,000		Loss on disposal of equipment		88,000
Accounts receivable		145,000		Interest expense		156,000
Sales commission expense		84,000		Common shares		1,000,000

Sheffield's Rose effective tax rate on all items is 20%. A physical inventory indicates that the ending inventory is $ 690,000. The number of common shares outstanding is 100,000. Prepare a condensed multi-step 2020 income statement for Sheffield Rose Corporation, showing expenses by function. Sheffield Rose follows ASPE but decides to disclose EPS on its income statement. (Round per share answer to 2 decimal places, e.g. 52.74.)

Q3.

The financial records of Culver Inc. were destroyed by fire at the end of 2020. Fortunately, the controller had kept the following statistical data related to the income statement:

1.		The beginning merchandise inventory was $ 80,000 and it decreased by 20% during the current year.
2.		There were 10,000 common shares outstanding for the entire year.
3.		Interest expense was $ 25,000.
4.		The income tax rate was 25%.
5.		Cost of goods sold amounted to $ 440,000.
6.		Administrative expenses were 20% of cost of goods sold but only 4% of gross sales.
7.		Selling expenses were four fifths of cost of goods sold.

Prepare a single-step income statement for the year ended December 31, 2020, including calculation of EPS. Expenses should be shown by function. (Round per share answer to 2 decimal places, e.g. 52.75.)