analytical and interpretive procedures are to be undertaken. The completed statements $($summarized$)$ are as follows:

Year $5$

Year $4$

Statement of Earnings

Sales revenue

SUGO, $0000$

$$840,000$

Cost of sales Gross profit

$540,000380,000$

$460,000$

$420,000342,000$

Operating expenses $($including interest on bonds$)$

$136,000$

Pretas earnings

$44,000$

Income tax expense

$24,000$

$12,000$

Net earnings

$$54,000$

$$12,000$

Statement of Financial Position

Cash

Accounts receivable $($net$)$

$$11,600$

$ $7,800$

$84,00050,000$

Merchandise inventory Prepayments

$400$

$56,000$

$40,000$

$200$

Property, plant, and equipment $($net$)$

$260,000$

$240,000$

$$408,000$

$$344,000$

Account's payable Income taxes payable

Bonds payable $(5\%$ interest rate$)$

Common shares $(40,000$ shares$)$

Retained earnings

$*$Credit sales totalled $40$ percent of total sales

$6$

$$14,000$

$ $10,0004,000$

$22,000$

$140,000$

$32,000$d

$4,000$

$$400,000$

$$344,000$