7,500 Comparative Balance Sheet Accounts As of December 31, 2020 and 2019 December 31 Debit Accounts 2020 2019 Cash $ 42,000 $ 33,750 Accounts Receivable 70,500 60,000 Inventory 30,000 24,000 Equity investments 22,250 38,500 Machinery 30,000 18,750 Buildings 67,500 56,250 Land 7,500 $269,750 $238,750 Credit Accounts Allowance for Doubtful Accounts $ 2,250 $ 1,500 Accumulated Depreciation-Machinery 5,625 2,250 Accumulated Depreciation-Buildings 13,500 9,000 Accounts Payable 35,000 24,750 Accrued Payables 3,375 2,625 Long-Term Notes Payable 21,000 31,000 Common Stock, no par 150,000 125,000 Retained Earnings 39,000 42,625 $269,750 $238,750 Additional data (ignoring taxes): 1. Net income for the year was $42,500. 2. Cash dividends declared and paid during the year were $21,125. 3. A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized. 4. Equity investments (level of ownership is less than 20%) that cost $25,000 were sold during the year for $28,750. No unrealized gains and losses were recorded on these investments in 2020. 5. Machinery that cost $3,750, on which $750 of depreciation had accumulated, was sold for $2,200. SE 2020 income statement follows (ignoring taxes). Sales revenue $540,000 Less: Cost of goods sold 380,000 Gross margin 160,000 Less: Operating expenses (includes $8,625 depreciation and $5,400 bad debts) 120,450 Income from operations 39,550 Other: Gain on sale of investments Loss on sale of machinery (800) Net income $ 42,500 $3,750 2,950 7,500 Comparative Balance Sheet Accounts As of December 31, 2020 and 2019 December 31 Debit Accounts 2020 2019 Cash $ 42,000 $ 33,750 Accounts Receivable 70,500 60,000 Inventory 30,000 24,000 Equity investments 22,250 38,500 Machinery 30,000 18,750 Buildings 67,500 56,250 Land 7,500 $269,750 $238,750 Credit Accounts Allowance for Doubtful Accounts $ 2,250 $ 1,500 Accumulated Depreciation-Machinery 5,625 2,250 Accumulated Depreciation-Buildings 13,500 9,000 Accounts Payable 35,000 24,750 Accrued Payables 3,375 2,625 Long-Term Notes Payable 21,000 31,000 Common Stock, no par 150,000 125,000 Retained Earnings 39,000 42,625 $269,750 $238,750 Additional data (ignoring taxes): 1. Net income for the year was $42,500. 2. Cash dividends declared and paid during the year were $21,125. 3. A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized. 4. Equity investments (level of ownership is less than 20%) that cost $25,000 were sold during the year for $28,750. No unrealized gains and losses were recorded on these investments in 2020. 5. Machinery that cost $3,750, on which $750 of depreciation had accumulated, was sold for $2,200. SE 2020 income statement follows (ignoring taxes). Sales revenue $540,000 Less: Cost of goods sold 380,000 Gross margin 160,000 Less: Operating expenses (includes $8,625 depreciation and $5,400 bad debts) 120,450 Income from operations 39,550 Other: Gain on sale of investments Loss on sale of machinery (800) Net income $ 42,500 $3,750 2,950