1. Stein Books Inc. sold 2,300 finance textbooks for $220 each to High Tuition University in 20X1. These books cost $200 to produce. Stein Books spent $12,500 (selling expense) to convince the university to buy its books. Depreciation expense for the year was $15,800. In addition, Stein Books borrowed $100,000 on January 1, 20X1, on which the company paid 14 percent interest. Both the interest and principal of the loan were paid on December 31, 20X1. The publishing firms tax rate is 30 percent. Prepare an income statement for Stein Books.

2

Arrange the following items in proper balance sheet presentation: (Amounts to be deducted should be indicated with parentheses or a minus sign.)

Accumulated depreciation	$	352,000
Retained earnings		109,000
Cash		16,000
Bonds payable		171,000
Accounts receivable		53,000
Plant and equipmentoriginal cost		775,000
Accounts payable		43,000
Allowance for bad debts		10,000
Common stock, $1 par, 100,000 shares outstanding		100,000
Inventory		75,000
Preferred stock, $56 par, 1,000 shares outstanding		56,000
Marketable securities		28,000
Investments		26,000
Notes payable		35,000
Capital paid in excess of par (common stock)		97,000