Balance sheet as of December 31, 2018 December 31, 2019 Cash Accounts receivable Inventory Note receivable Net PP&E $120 230 120 100 500 Total assets Trade accounts payable Warranty obligations Unearned revenue Other operating payables Interest payable $1070 ===== $100 10 50 90 Dividends payable Note payable Paid-in-capital Retained income Total liabilities and equity Income statement for Service revenue Retail revenue Total revenue Returns 800 20 $1070 ===== 2018 $50 250 ---- $300 Net revenue $300 Cost of retail sales (100) Salaries (50) Depreciation (80) Warranty expense Other operating expenses Operating income (20) (30) ---- $20 Interest revenue Interest expense Loss on sale of PP&E Net income $20 ==== (10) (170) (80) (40) (50) (40) $2000 he carrying amount of the PP&E item sold in 2019 is $90 at the date of the sale. Any needed warranty work is sent to an outside contractor, who is paid cash, to be ompleted.