The following is information for Flounder Corp. for the year ended December 31, 2020: Sales revenue...

The following is information for Flounder Corp. for the year ended December 31, 2020: Sales revenue $1,480,000 Loss on inventory due to decline in net realizable value $74,000 Unrealized gain on FV-OCI equity investments 44,000 Loss on disposal of equipment 35,000 Interest income 7,000 Depreciation expense related to buildings omitted by mistake in 2019 53,000 Cost of goods sold 888,000 Retained earnings at December 31, 2019 990,000 Selling expenses 74,000 Loss from expropriation of land 60,000 Administrative expenses 50,000 Dividends declared 43,000 Dividend revenue 18,000 The effective tax rate is 30% on all items. Flounder prepares financial statements in accordance with IFRS. The FV-OCI equity investments trade on the stock exchange. Gains/losses on FV-OCI investments are not recycled through net income.

a) Prepare a multiple-step statement of financial performance for 2020, showing expenses by function. Ignore calculation of EPS.

b) Prepare the retained earnings section of the statement of changes in equity for 2020. (List items that increase retained earnings first following the adjustment of prior years.)

c) Prepare the journal entry to record the depreciation expense omitted by mistake in 2019. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Expert Solution

ekkarill92 answered 2 hours ago

Flounder Corp.’s income statement for the year ended December 31, 2020, had the following condensed information:...

Flounder Corp.’s income statement for the year ended December 31, 2020, had the following condensed information: Service revenue $773,000 Operating expenses (excluding depreciation) $491,000 Depreciation expense 60,000 Unrealized loss on FV-NI investments 4,700 Loss on sale of equipment 12,300 568,000 Income before income taxes 205,000 Income tax expense 57,000 Net income $148,000 There were no purchases or sales of trading (FV-NI) investments during 2020. Flounder’s statement of financial position included the following comparative data at December 31: 2020 2019 FV-NI...

Income Statement for the year ended December 31, 2020 (millions of $) Revenue (sales) $773 Cost...

Income Statement for the year ended December 31, 2020 (millions of $) Revenue (sales) $773 Cost of goods sold 595 Selling, general, and administrative expenses* 130 Loss on disposal of plant** 6 Interest expense 12 Income tax expense 10 Net income $ 20 *Includes depreciation expense of $30 million, insurance expense of $8 million, bad debt expense of $6 million, and salaries expense of $86 million. ** During 2020, the company purchased two pieces of equipment costing a total...

Blue Corp.’s income statement for the year ended December 31, 2020, had the following condensed information:...

Blue Corp.’s income statement for the year ended December 31, 2020, had the following condensed information: Service revenue $775,500 Operating expenses (excluding depreciation) $491,000 Depreciation expense 66,000 Unrealized loss on FV-NI investments 5,000 Loss on sale of equipment 12,500 574,500 Income before income taxes 201,000 Income tax expense 50,000 Net income $151,000 There were no purchases or sales of trading (FV-NI) investments during 2020. Blue’s statement of financial position included the following comparative data at December 31: 2020 2019 FV-NI...

Cheyenne Corp.’s income statement for the year ended December 31, 2020, had the following condensed information:...

Cheyenne Corp.’s income statement for the year ended December 31, 2020, had the following condensed information: Service revenue $773,600 Operating expenses (excluding depreciation) $497,000 Depreciation expense 57,000 Unrealized loss on FV-NI investments 4,500 Loss on sale of equipment 12,100 570,600 Income before income taxes 203,000 Income tax expense 52,000 Net income $151,000 There were no purchases or sales of trading (FV-NI) investments during 2020. Cheyenne’s statement of financial position included the following comparative data at December 31: 2020 2019 FV-NI...

The following information is available for Gulf Corp. on December 31 for the year just ended....

The following information is available for Gulf Corp. on December 31 for the year just ended. The estimated yearly depreciation on the building is $950. This year's advertising bill for $12,000 is unrecorded and unpaid. Unpaid and unrecorded salaries at year-end totalled $47,500. The estimated yearly depreciation on the furniture is $900. $600 of property taxes have accrued and are unrecorded. A review of the $4,400 unadjusted balance in the supplies account shows a balance on hand at the end...

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Royal West Airlines Ltd. Income Statement For the Year Ended December 31, 2020 Sales revenue $2,561,096 Cost of sales (1,003,860) Gross margin $1,557,236 Other expenses ( 890,743) Net income, before income tax $ 666,493 Royal West Airlines is a regional airline that services Western Canada. Notes: a) $10,000 in legal fees relating to the restructuring of a debt. b) A brand new airplane costing $65,000 used to service a new route c) Interest on late municipal tax balances of $1,000...

The following are Flounder Corp.’s comparative balance sheet accounts at December 31, 2020 and 2019, with...

The following are Flounder Corp.’s comparative balance sheet accounts at December 31, 2020 and 2019, with a column showing the increase (decrease) from 2019 to 2020. COMPARATIVE BALANCE SHEETS 2020 2019 Increase (Decrease) Cash $822,600 $700,100 $122,500 Accounts receivable 1,139,300 1,157,900 (18,600 ) Inventory 1,835,600 1,726,700 108,900 Property, plant, and equipment 3,276,300 2,980,900 295,400 Accumulated depreciation (1,165,600 ) (1,047,400 ) (118,200 ) Investment in Myers Co. 312,200 272,500 39,700 Loan receivable 251,900 — 251,900 Total assets $6,472,300 $5,790,700 $681,600 Accounts...

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The records of Earthly Goods provided the following information for the year ended December 31, 2020. At Cost At Retail January 1 beginning inventory $ 466,350 $ 922,150 Purchases 3,184,200 6,393,700 Purchase returns 51,800 118,350 Sales 5,485,700 Sales returns 44,100 Required: 1. Prepare an estimate of the company’s year-end inventory by the retail method. (Round all calculations to two decimal places.) Under the assumption the company took a year-end physical inventory at marked selling prices that totalled $1,674,800, prepare a...

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