User "The following is the adjusted trial balance for ACME Incorporated for the years ended June 30, 2017 and 2018. The income tax rate was 25% for both years and the company reports under IFRS (ignore tax impacts on OCI items). Required: create a complete set of financial statements for 2018 in accordance with International Financial Reporting Standards." 2018 2017 Account Debit Credit Debit Credit Cash1 387,250 286,500 Accounts receivable2 378,000 428,000 Merchandise Inventory 202,000 179,000 Discontinued operations held for sale (assets)3 513,000 741,000 Long-term investment in bonds (FV-OCI) 200,000 220,000 Equipment4 1,890,000 1,220,000 Accumulated depreciation 700,000 622,000 Patents 175,000 275,000 Accounts payable 235,000 170,000 Notes payable (due May 01, 2019) 230,000 180,000 Bonuses payable 90,000 17,000 Discontinued operations held for sale (liabilities)3 257,000 257,000 Bonds payable (due January 01, 2025) 250,000 250,000 Common shares5 600,000 500,000 Preferred shares6 375,000 375,000 Retained earnings 723,250 236,500 Accumulated Other Comprehensive Income 93,000 103,000 Common share Dividends declared 70,000 Preferred share Dividends declared 30,000 Sales revenue - water pistols 1,005,000 850,000 Cost of goods sold - water pistols 367,000 365,000 Operating & selling expenses - water pistols 123,000 130,000 Depreciation expense 78,000 78,000 Interest expense 12,000 15,000 Before tax earnings - discontinued Kazoo division7 115,000 387,000 Gain/loss on write-down of assets - discontinued Kazoo division7 228,000 - Loss on valuation of long-term investment in bonds (FV-OCI) 20,000 10,000 Total $4,673,250 $4,673,250 $3,947,500 $3,947,500 Notes (2018): 1. Cash consists of cheqing accounts $240,000; savings accounts $154,250 at RBC and an overdrawn account ($7,000), ($0, 2017) at CIBC 2. Accounts receivable includes two customers with credit balances of $5,000 and $8,000 (no credit balances in 2017) 3. Discontinued assets and liabilities relate to the Kazoo Division. The current portion is $49,000 and $127,000 assets and liabilities respectively. 4. Equipment and related depreciation relates to the Water Pistol Division 5. Common shares, unlimited authorized, 300,000 issued & outstanding at June 30, 2017 6. Preferred shares, 150,000 authorized, 10,000 issued & outstanding at June 30, 2017 7. Sale of the Kazoo division was expected to be completed by November; however, the buyer ran into financing difficulties and the revised closing date is May 2019. Management is confident that the sale will be completed. Other Information (2018) 1. All amounts are before tax 2. Equipment was purchased with cash and a note payable 3. 10,000 common shares were issued on July 1st, 2017 4. Assume all differences flow from logical sources 5. The effective tax rate is 25% 6. Classify the net tax impact on impairments as "deferred tax asset/liability" in the non-current section of the SFP 7. The note from 2017 was paid in full Other Information (2017) 1. All amounts are before tax 2. No share transactions took place during the 2017 fiscal year ACME Incorporated Closing Trial Balance June 30, 2018 June 30, 2017 Account Debit Credit Debit Credit Cash 387,250 286,500 Accounts receivable 378,000 428,000 Merchandise Inventory 202,000 179,000 Discontinued operations held for sale (assets) 513,000 741,000 Long-term investment in bonds (FV-OCI) 200,000 220,000 Equipment 1,890,000 1,220,000 Accumulated depreciation 700,000 622,000 Patents 175,000 275,000 Accounts payable 235,000 170,000 Notes payable (due May 01, 2019) 230,000 180,000 Bonuses payable 90,000 17,000 Income tax payable 135,000 162,250 Discontinued operations held for sale (liabilities) 257,000 257,000 Bonds payable (due January 01, 2025) 250,000 250,000 Deferred tax asset 57,000 - Common shares 600,000 500,000 Preferred shares 375,000 375,000 Retained earnings 857,250 723,250 Accumulated Other Comprehensive Income 73,000 93,000 Total $3,802,250 $3,802,250 $3,349,500 $3,349,500 PREPARE FINANCIAL STATEMENT