Trout Corporation as of December 31

  

Presented below are the balance sheets of Trout Corporation as of December 31, Year 1
and Year 2, and the income statement for the year ended December 31, Year 2. The
statement of retained earnings for the year ended December 31, Year 2 is on the next page.
All dollars are in thousands.

Trout Corporation
Balance Sheets
December 31, Year 1 and Year 2
Year 1

Year 2

Cash
Treasury Bills & Commercial Paper
Accounts Receivable, net
Inventories
Land
Plant and Equipment
Accumulated Depreciation
Total Assets

$204
143
495
780
250
900
(170)
$2,602

$403
106
695
895
350
1,398
(295)
$3,552

Liabilities & Stockholders’ Equity
Accounts Payable
Dividends Payable
Accrued Liabilities
Notes Payable, Long-Term
Bonds Payable
Bond Discount
Common Stock, Par Value $20
Additional Paid-In Capital
Retained Earnings
Total Liabilities & Stockholders’ Equity

$700
-168
-500
(18)
600
244
408
$2,602

$650
10
413
450
500
(16)
640
304
601
$3,552

Assets

Trout Corporation
Income Statement
For the Year Ended December 31, Year 2
Net Sales Revenue
Operating Expenses:
Cost of Goods
Selling & Administrative Expenses
Operating Income
Other Income (Expense):
Interest Expense
Gain on Sale of Equipment

$2,000
$1,126
456

$(80)
5

1,582
$418

(75)

Pre-Tax Income from Continuing Operations
Less: Income Tax Expense:
Net Income

$343
90
$253

Trout Corporation
Statement of Retained Earnings
For the Year Ended December 31, Year 2
Retained Earnings as of January 1, Year 2
Add:
Net Income
Deduct: Dividend Declared, October 10, Year 2
Retained Earnings, December 31, Year 2

$388
$ 253
(40)

213
$601

Additional Information:
1. On April 15, Year 2, Trout issued 2 shares of its common stock for land having a fair
value
of $100.
2. On May 25, Year 2, Trout borrowed money from an insurance company. The
underlying
promissory note bears interest at 15% and is payable in three equal annual
installments of
$150. The first payment is due on May 25, Year 3.
3. On July 1, Year 2, Trout sold equipment costing $52 for $33 cash.
4. On October 10, Year 2, Trout declared a cash dividend of $40 on its common stock.
5. The Selling and Administrative Expense account includes Depreciation Expense.