Question 4

The following trial balance of Sunland Company at December 31, 2017 has been properly adjusted except for the income tax expense adjustment.

Sunland Company

Trial Balance

December 31, 2017

Dr. Cr.

Cash $ 874500

Accounts receivable (net) 2704000

Inventory 2089000

Property, plant, and equipment (net) 7565000

Accounts payable and accrued liabilities $ 1761000

Income taxes payable 657000

Deferred income tax liability 85000

Common stock 2357000

Additional paid-in capital 3685000

Retained earnings, 1/1/17 3506000

Net sales and other revenues 13533500

Costs and expenses 11180000

Income tax expenses 1172000

$25584500 $25584500

Other financial data for the year ended December 31, 2017:

Included in accounts receivable is $1210000 due from a customer and payable in quarterly installments of $151250. The last payment is due December 29, 2019.

The balance in the Deferred Income Tax Liability account pertains to a temporary difference that arose in a prior year, of which $19000 is classified as a current liability.

During the year, estimated tax payments of $515000 were charged to income tax expense. The current and future tax rate on all types of income is 30%.

In Sunland's December 31, 2017 balance sheet,

The final retained earnings balance is

$4772500.

$5131600.

$4687500.

$5202500.