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

31-Dec-17

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

$25,584,500 $25,584,500

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

$4,772,500.00

$5,131,600.00

$4,687,500.00

$5,202,500.00