The statement of income and unclassified statement of financial position for Sunland, Inc. follow: SUNLAND, INC. Statement of Financial Position December 31 Assets 2021 2020 Cash $98.400 $47,600 Trading investments 122,000 115,500 Accounts receivable 77,500 40,100 Inventory 120.200 91.150 Estimated inventory returns 3,000 2.400 Prepaid expenses 18,300 26,600 Equipment 272.000 253.500 Accumulated depreciation (47.000) (52.800 Total assets $664.400 $524,050 Liabilities and Shareholders' Equity Accounts payable $93.000 $79.300 Property tax payable 9.400 6.900 Refund liability 1.200 900 Bank loan payable--current portion 61.000 100.650 Bank loan payable noncurrent portion 42.800 22,800 Common shares 210,000 185.000 Retained earnings 247.000 128.500 Total liabilities and shareholders' equity $664,400 $524050 SUNLAND, INC. Statement of Income Year Ended December 31, 2021 Sales Cost of goods sold Gross profit Operating expenses Income from operations Other income and expenses Unrealized gain on trading investments $6,500 Interest expense Income before income tax Income tax expense Net income $577,250 187.650 389,600 116,450 273,150 WP (4.710 1.790 274,940 50,000 $224,940 Additional information regarding 2021 1. 2. 3. 4. 5. 6. Prepaid expenses and property tax payable relate to operating expenses. New equipment costing $80,000 was purchased for $21.900 cash and a $58,100 long-term bank loan payable. Old equipment having an original cost of $61.500 was sold for $1.100 Accounts payable relate to inventory suppliers. Some of the bank loan was repaid during the year. A dividend was paid during the year. Operating expenses include $47.000 of depreciation expense and a $7,600 loss on disposal of equipment Common shares were issued for $43,000 cash during the year and some common shares were bought back and retired at the cost they were originally issued at. 7. 8 SUNLAND, INC. Statement of Cash Flows Adjustments to reconcile net income to > > $ > this $ > 5 Note X to the Statement of Cash Flows: During the year, the company purchased equipment costings paying $21.900 cash and issuing a $58,100 bank loan payable