Question
Sunland Corporations trial balance at December 31, 2021, is presented below. SUNLAND CORPORATION Trial Balance December 31, 2021 Debit Credit Cash $ 48,000 Accounts receivable
Sunland Corporations trial balance at December 31, 2021, is presented below.
SUNLAND CORPORATION Trial Balance December 31, 2021 | |||
Debit | Credit | ||
Cash | $ 48,000 | ||
Accounts receivable | 51,000 | ||
Allowance for doubtful accounts | $ 2,500 | ||
Merchandise inventory | 22,700 | ||
Investment in associate | 85,000 | ||
Investment at FVTOCIequity | 30,000 | ||
Land | 90,000 | ||
Building | 200,000 | ||
Accumulated depreciationbuilding | 40,000 | ||
Equipment | 40,000 | ||
Accumulated depreciationequipment | 15,000 | ||
Accounts payable | 18,775 | ||
Income tax payable | 4,500 | ||
Bonds payable (6%, due January 1, 2026) | 126,025 | ||
Common shares, unlimited number of no par value shares authorized, 100,000 issued | 100,000 | ||
Retained earnings | 110,775 | ||
Accumulated other comprehensive income | 5,000 | ||
Sales | 750,000 | ||
Cost of goods sold | 370,000 | ||
Operating expenses | 180,000 | ||
Interest revenue | 375 | ||
Interest expense | 6,250 | ||
Income tax expense | 50,000 | ||
Total | $1,172,950 | $1,172,950 |
All transactions and adjustments for 2021 have been recorded and reported in the trial balance except for the items described below.
Jan. 7 | Issued 1,200 preferred shares for $25,000. In total, 100,000, $2, noncumulative, convertible, preferred shares are authorized. Each preferred share is convertible into five common shares. |
Mar. 16 | Purchased 800 common shares of Osborne Inc., to be held for trading purposes, for $25 per share. |
July 1 | Purchased $100,000 Solar Inc. 10-year, 5% bonds at 108.2, when the market interest rate was 4%. Interest is received semi-annually on July 1 and January 1. Sunland purchased the bonds to earn interest. |
Aug. 2 | Sold the Osborne common shares for $26 per share. |
5 | Invested $20,000 in a money-market fund. |
Sept. 25 | 600 of the preferred shares issued on January 7 were converted into common shares. |
Oct. 24 | Cashed in the money-market fund, receiving $20,000 plus $200 interest. |
Nov. 30 | Obtained a $50,000 bank loan by issuing a three-year, 6% note payable. Sunland is required to make equal blended payments of $1,521 at the end of each month. The first payment was made on December 31. Note that at December 31, $15,757 of the note payable is due within the next year. |
Dec. 1 | Declared the annual dividend on the preferred shares on December 1 to shareholders of record on December 23, payable on January 15. |
31 | Sunland owns 40% of RES. RES earned $22,400 and paid dividends of $1,400 in 2021. The fair value of the RES investment was $98,000. |
31 | Semi-annual interest is receivable on the Solar Inc. bonds on January 1, 2022. The bonds were trading at 106 on December 31, 2021. |
31 | The annual interest is due on the bonds payable on January 1, 2022. The par value of the bonds is $130,000 and the bonds were issued when the market interest rate was 7%. |
31 | The fair value of the long-term investment at FVTOCIequity was $28,200. Ignore income tax calculation. |
Question Part Score
--/3
Prepare the statement of comprehensive income for Sunland. For the purposes of this question, ignore the income tax on other comprehensive income and accumulated other comprehensive income. (Round answers to 0 decimal places, e.g. 5,275.)
Prepare the statement of changes in shareholders equity for Sunland. For the purposes of this question, ignore the income tax on other comprehensive income. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round answers to 0 decimal places, e.g. 5,275.)
SUNLAND CORPORATION Statement of Changes in Shareholders Equity Year Ended December 31, 2021December 31, 2021Month Ended December 31, 2021 | ||||||||||
Preferred Shares | Common Shares | Retained Earnings | Accumulated Other Comprehensive Income | Total | ||||||
Balance, January 1, 2021 | $ | $ | $ | $ | $ | |||||
Issued shares for cash | ||||||||||
Preferred shares converted | ||||||||||
Cash dividendspreferred | ||||||||||
Comprehensive income | ||||||||||
Balance, December 31, 2021 | $ | $ | $ | $ | $ |
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