Question

The following trial balance of Cullumber Company at December 31, 2020 has been properly adjusted except for the income tax expense adjustment.

Cullumber Company Trial Balance December 31, 2020
		Dr.			Cr.
Cash		$	874500
Accounts receivable (net)			2700000
Inventory			2080000
Property, plant, and equipment (net)			7567000
Accounts payable and accrued liabilities					$	1768000
Income taxes payable						658000
Deferred income tax liability						83500
Common stock						2352000
Additional paid-in capital						3685000
Retained earnings, 1/1/20						3486000
Net sales and other revenues						12877000
Costs and expenses			11160000
Income tax expenses			528000
			$24909500			$24909500

Included in accounts receivable is $1210000 due from a customer and payable in quarterly installments of $151250. The last payment is due December 29, 2022.

In Cullumber’s December 31, 2020 balance sheet,

The final retained earnings balance is

$4591500.

$5203000.

$3486000.

$4675000.

Answer 1

Cullumber Company
Income Statement
At December 31, 2020
Revenues
Net sales and other revenues		12,877,000
Expenses:
Cost and expenses	11,160,000
Income tax expense	528,000
Total expenses		-11,688,000
Net income		$1,189,000

Statement of Retained Earnings
Beginning retained earnings	3,486,000
Net Income	1,189,000
	$4,675,000
Dividends	0
Retained earnings, Ending	$4,675,000

In Cullumber’s December 31, 2020 balance sheet, The final retained earnings balance is $4,675,000.

Fourth option is correct.