Reference no: EM132475769

Below is the trial balance of Saturn Corporation on December 31, 2019. The accounts are listed in alphabetical order and all accounts have normal balances.

Account Title:

Balance:                                                                                          Balance:

Accounts Payable = 1660                                                 Interest Expense = 560

Accounts Receivable = 2580                                              Interest Payable = 80

Accum. Amort. - Copyright = 420                                       Interest Receivable = 10

Accum. Amort. - Patent = 390                                           Interest Revenue = 90

Accum. Depl. - Gold Mine = 4300                                        Land = 5000

Accum. Depr. - Bldngs. = 3600                                           LongTerm Investments in Bonds=4400

Accum. Depr. - Equip. = 1320                                             Longterm investment subsidiary=12600

Adjustment to Market (debit balance) = 260                          Loss of Sale of AFS Sec.=260

Administrative Expenses = 7800                                            Marketable securities = 2840

Allowance for Bad Debts = 500                                             Merchandise Inventory=1390

APIC-Common = 2200                                                        Mortgage note payable(30yr)=18000

APIC-Preferred = 1400                                                      Notes Receivable(short-term)=1200

APIC-Treasury = 300                                                           Patent = 1260

Bonds Payable (15 year) = 22500                                          Preferred Stock = 5000

Buildings = 32500                                                                 Prepaid insurance = 990

Cash = 7120                                                                             Rental Revenue = 250

Cash Dividends Declared = 700                                                      Retained Earnings = 8290

Common Stock = 12000                                                                Salaries Payable = 560

Common Stock Dividend Distributable = 900                                      Sales = 53800

Copyright = 880 Sales                                                                   Discounts = 820

Cost of Goods sold = 26200                                                      Sales Returns & Allowances = 1460

Discount on Bonds Payable = 1400                                            Selling Expense = 12700

Dividends revenue = 60                                                            short term notes payable = 950

Dividends Payable = 250                                                           SIT Payable = 160

Equipment = 6600                                                                   Stock Dividends Declared = 400

FICA Taxes Payable = 140                                                        Subsidiary Income = 1180

FIT Payable = 330                                                                    Supplies = 610

FUTA Taxes Payable = 20                                                         SUTA Taxes Payable = 60

Gain on Disposal of Plant Assets = 120                                        Treasury Stock = 950

Gold Mine = 7100                                                                       Unrealized gain on Valuation of MS(debt)=440

Income Tax Expense = 1080                                                         Unrealized loss valuation of MS(equity)=180

Income Tax Payable = 280                                                           Unearned Rental Revenue = 300

REQUIRED:

Question 1: Prepare the financial statements for the year for Saturn Corporation--a multi-step income statement, a statement of retained earnings and a classified balance sheet.

Question 2: What is different for this project compared to Project #4?

New Accounts:

1. Bonds Payable is a long-term liability account
2. Premium on Bonds Payable and Discount on Bonds Payable are an adjunct and contra account TO the Bonds Payable account
3. Mortgages Payable is a long-term liability account

Marketable Securities is a current asset.

1. Adjustment to Market accounts are either an adjunct (debit balance) OR a contra (credit balance) to the Marketable Securities account.
2. Losses and Gains on Sales of investment assets are realized gains and losses on the income statement Unrealized Losses and Gains on investment assets are on the income statement if the investments are trading securities and are on the stockholders' equity section of the balance sheet if the investments are available for sale securities (as either a contra or adjunct account to the total of paid in capital and retained earnings)
3. Long-Term Investments in Bonds are long-term investments
4. Long-Term Investments in Subsidiary Company (under the equity method) are long-term investments Subsidiary Income (our share of subsidiary net income under the equity method) is on the income statement
5. Dividend Revenue is on the income statement

Classified Balance Sheet:

1. We will now have FOUR asset categories: current, plant, intangible, and long-term investments