The following trial balance of Reese Corp. at December 31, 2014 has been properl

Question

The following trial balance of Reese Corp. at December 31, 2014 has been properly adjusted except for the income tax expense adjustment. Other financial data for the year ended December 31, 2014: Included in accounts receivable is $1,200,000 due from a customer and payable in quarterly installments of $150,000. The last payment is due December 29, 2016. The balance in the Deferred Income Tax Liability account pertains to a temporary difference that arose in a prior year, of which $20,000 is classified as a current liability. During the year, estimated tax payments of $525,000 were charged to income tax expense. The current and future tax rate on all types of income is 30%. Prepare Reese's December 31, 2014 balance sheet, including ending retained earnings.

Explanation / Answer

Balance Sheet as on 31.12.2014 Particlars Amount Particulars Amount Accounts payable and acc 1701000 Cash 775000 Income tax payable 654000 Accounts receivable 2695000 Deferred tax liability 85000 Inventory 2085000 common stock 2350000 Property 7566000 Add paid in capital 3680000 Retained earnings 3450000 Ending retained earnings 1201000 Total 13121000 Total 13121000

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