The following adjusted accounts are organized by Stiller Corp. as of December 31, 2010.

Stiller Corporation

Adjusted Trial Balance

December 31, 2010

Debit Balance Accounts

Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $230,000

Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130,000

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,500

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,000

Shortterm investments (at fair value) . . . . . . . . . . . . . . . . . . . . . . . . . 12,000

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,000

Merchandise inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.000

Office supplies inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000

Investment in bonds of Sigma Corp. (longterm) . . . . . . . . . . . . . . . . . 33,000

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000

Plant and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,000

Franchise (less amortization) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000

Idle equipment held for disposal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500

Dividends declared and paid during 2020 . . . . . . . . . . . . . . . . . . . . . . 40,000

$845,000

Credit Balance Accounts

Sales revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $490,000

Accumulated depreciation, plant and equipment . . . . . . . . . . . . . . . . . 40,000

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000

Income taxes payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,000

Bonds payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000

Allowance for doubtful accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000

Premium on bonds payable (unamortized). . . . . . . . . . . . . . . . . . . . . . 1,000

Common stock, par $10 (authorized 50,000 shares) . . . . . . . . . . . . . . 150,000

Excess of issue price over par of common stock . . . . . . . . . . . . . . . . . 18,000

Retained earnings, January 1, 2020. . . . . . . . . . . . . . . . . . . . . . . . . . . 32,000

$845,000

Additional information

1. Inventory cost is recorded at the lower of cost or market, where market is computed using the average cost

method.

2. Plant and equipment consists of a building ($120,000) and equipment ($15,000). The building and equip-

ment are depreciated using the straight-line method over estimated useful life. The estimated useful life of

the building is 20 years and the equipment is 5 years.

3. Franchise is amortized using the straight-line method over a period of 10 years.

4. The 9% bonds were issued on January 1, 2008, and have a 10-year maturity date.

Required

a. Prepare an income statement for Stiller Corp. (including earnings per share disclosure) for the year ended

December 31, 2010.

b. Prepare a classified balance sheet for Stiller Corp. as of December 31, 2010.

c. Identify the accounts from the classified balance sheet where disclosure is likely is in the (1) summary of

significant accounting policies disclosure note or (2) as a separate disclosure note.