On December 31, 2020, Information Inc. completed its third year of operations. Abdul Mukhtar is a student working part-time in the company’s business office while taking his first accounting course. Abdul assembled the following list of account balances, which are not arranged in any particular order:

These account amounts are correct, but Abdul did not consider the following information: 

1. The amount shown as insurance expense includes $900 for coverage during the first two months of 2021.

2. The note receivable is a six-month note that has been outstanding for four months. The interest rate is 10% per year. The interest will be received by the company when the note becomes due at the end of February 2021.

3. As at December 31, 2020, the supplies still on hand had a cost of $600.

4. On November 1, 2020, the company rented surplus space in one of its building to a tenant for $1,000 per month. The tenant paid for six months in advance.

5. Depreciation for 2020 is $10,000 on the buildings and $20,000 on the equipment.

6. Employees earned $3,000 of wages in December 2020 that will not be paid until the first scheduled payday in 2021.

7. Additional dividends of $50,000 were declared in December 2020, but will not be paid until January 2021.

Required

a. Determine the amounts that would appear in an adjusted trial balance for Information Inc. as at December 31, 2020.

b. Prepare a statement of income for the year ended December 31, 2020.

c. Calculate the amount of retained earnings as at December 31, 2020.

d. Prepare a classified statement of financial position as at December 31, 2020.

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$ 76,000 Accounts Receivable $150,000 Advertising Expense Interest Expense 2,000 20,000 Cash Notes Receivable 26,000 Inventory 140,000 Cost of Goods Sold 590,000 Dividends Declared 12,000 Common Shares 570,000 Unearned Revenue 6,000 Insurance Expense Buildings 360,000 6,300 Accumulated Depreciation, Equipment 20,000 Retained Earnings (as at January 1, 2020) 177,000 Land 160,000 Equipment 200,000 Accumulated Depreciation, Buildings 40,000 Miscellaneous Expense 5,200 Sales 963,000 Accounts Payable 72,700 Wages Expense Utilities Expense 2,500 125,000 Notes Payable 30,000 Supplies 3,700