Question

Polis Corp.’s trial balance at December 31, 2020 is properly adjusted except for the income tax...

Polis Corp.’s trial balance at December 31, 2020 is properly adjusted except for the income tax expense adjustment.

PolisCorp. Trial Balance December 31, 2020

Dr. Cr. Cash $ 337,500 Accounts receivable (net) 1,447,500 Inventory 1,192,500 Property, plant, and equipment (net) 4,183,000 Accounts payable and accrued liabilities $ 990,500 Income taxes payable 342,000 Future income tax liability 37,500 Common shares 1,675,000 Contributed surplus 1,340,000 Retained earnings, Jan 1, 2020 2,325,000 Net sales and other revenues 6,180,000 Costs and expenses 5,040,000 Income tax expenses 689,500 $12,890,000 $12,890,000

Other financial data for the year ended December 31, 2020:

• Included in accounts receivable is $360,000 due from a customer and payable in quarterly instalments of $45,000. The last payment is due December 29, 2022.

• The balance in the future income tax liability account relates to a temporary difference that arose in a prior year, of which $15,000 is classified as a current liability

. • During the year, estimated tax payments of $330,000 were charged to income tax expense. The current and future tax rate on all types of income is 35 percent.

In Polis’ December 31, 2020 statement of financial position, the current liabilities total is

Business   Accounting   
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Answer #1

  FINANCIAL STATEMENT

FOR THE YEAR ENDED 31/12/2020

Particulars Amount(in$)
Cash 337500

A/C recievable

(1447500-45000*4)(instalments of 45000 paid quarterly)

 1267500
Inventory 1192500
Total current assets 2797500
PPE 4183000
A/C recievable 180000
Total non current assets 4363000
Total assets 7160500
A/C payable 990500
Income tax payable 342000

Future income tax payable

(15000 to be treated as current liab)

 15000
Current liabilities 1347500
Future IT liabilities(37500-15000) 22500
Total non current liabilities 22500
Common shares 1675000
Contributed surplus 1340000

Retained earnings

(2325000+6180000(sale revenue)-504000(expenses)-689500(Income tax exp)

 2775000
Sh cap + ret earnings 5790000
Total Liabilities+ Equity 7160500

CURRENT LIABILITIES= $1347500

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