Sarasota 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. 2. 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 $97,200 with an estimated useful life of four years and no residual value. Sarasota has already recorded 2020 depreciation expense of $29,160 related to the assets, using the sum-of-the-years'-digits method. Ending inventory for 2019 was overstated by $21,600; ending inventory for 2020 is correctly stated. The adjusted trial balance at December 31, 2018, includes the following amounts: Cash $41,040; Inventory $120,960; Accounts Payable $51,840; Retained Earnings $77,760. Dividends of $32,400 and $27,000 were declared and paid on December 31, 2020, and December 31, 2019, respectively. Share capital of $32,400 consists of 21,600 common shares outstanding since the company's inception. 3. 4. 5. Sarasota'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. 2020 2019 SARASOTA INC. Statement of Financial Position As at December 31, 2020 Assets Cash Inventory Plant assets, net Total assets $64,800 115,560 29,160 $209,520 $36,720 138,240 58,320 $233,280 Liabilities and Shareholders' Equity Accounts payable Share capital Retained earnings Total liabilities and shareholders' equity $18,360 32,400 158,760 $209,520 $65,880 32,400 135,000 $233,280 SARASOTA INC. Income Statement Year Ended December 31, 2020 2020 Sales $367,200 Cost of goods sold 216.000 Gross profit 151,200 Operating expenses 95,040 Net income $56,160 2019 $291,600 153,360 138.240 54,000 $84,240 Prepare the comparative income statement for 2020. (Round earnings per share to 2 decimal places, e.g. 52.75.) SARASOTA INC. Income Statement For the Years Ended December 31 2019 Restated see note XX 2020 $ Net Income / (Loss) Balance, January 1, 2019 Earnings per Share Operating Expenses Cost of Goods Sold Dividends Sales Gross Profit Balance, December 31, 2020 $ $ $ $ e Textbook and Media SARASOTA INC. Statement of Changes in Equity For the Year Ended December 31, 2020 Share Capital Retained Earnings $ Balance, December 31, 2020 Dividends Cost of Goods Sold Sales Balance, January 1, 2019 Balance, December 31, 2019, as Restated Gross Profit Net Income / (Loss) 2019 (Restated) Operating Expenses Net income / (Loss) 2020 Earnings per Share $ $ e Textbook and Media Prepare the comparative statement of financial position as at December 31, 2020. (List Assets in order of liquidity. Do not leave any answer field blank. Enter O for amounts.) SARASOTA INC. Statement of Financial Position As at December 31, 2019 Restated see note XX As at December 31, 2020 As at January 1, 2019 Assets $ $ $ $ $ Liabilities and Shareholders' Equity $ $ $ $ $ $
