ABC Corporation had the following balance sheet on December 31, 20XX:

Balance Sheet
Current Assets		Liabilities
Cash	$16,300	Accounts payable	$14,600
Accounts receivable	16,000	Notes payable	20,400
Inventory	32,300	Bonds payable	58,000
Prepaid expenses	20,200
Capital Assets		Shareholders Equity
Plant and equipment (gross)	$254,000	Common stock	$75,000
Less: Accumulated amortization	51,600	Retained earnings	119,200
Net plant and equipment	202,400
Total assets	$287,200	Total liabilities and shareholders equity	$287,200

Sales for 20XY were $221,000, with cost of goods sold being 58 percent of sales. Amortization expense was 10 percent of plant and equipment (net) at the beginning of the year. Interest expense for the bonds payable was 11 percent, while interest on the notes payable was 12 percent. These are based on December 31, 20XX, balances. Selling and administrative expenses were $28,800, and the tax rate averaged 18 percent.

During 20XY, the cash balance and prepaid expense balance were unchanged. Accounts receivable and inventory each increased by 15 percent, and accounts payable increased by 31 percent. A new machine was purchased on December 31, 20XY, at a cost of $30,000. A cash dividend of $8,630 was paid to common shareholders at the end of 20XY. Also, notes payable increased by $2,898 and bonds payable decreased by 10,450. The common stock account did not change.

a. Prepare an income statement for 20XY.

b. Prepare a balance sheet as of December 31, 20XY.