Consultex, Inc. was founded in 2012 as a small financial consulting business. The company had done reasonably well in 2012-2014 but started noticing its cash dwindle early in 2015. In January 2015, Consultex had paid $20,000 to purchase land and repaid $2,000 principal on an existing promissory note. In March, the company paid $2,800 cash for dividends and $1,200 to repurchase Consultex stock that had previously been issued for $1,200. To improve its cash position, Consultex borrowed $5,800 by signing a new promissory note in May and also issued stock to a new private investor for $12,800 cash. Year-end comparative balance sheets and income statements are presented below. CONSULTEX, INC. Balance Sheet October 31 2015 2014 Assets Cash Accounts Receivable Prepaid Rent Land $ 7,730 15,600 2,400 32,000 $ 13,800 12,800 3,800 12,000 Total Assets $57,730 $ 42,400 Liabilities and Stockholders' Equity Salaries and Wages Payable Income Taxes Payable Notes Payable (long-term). Common Stock Retained Earnings $ 2,400 1,200 16,600 21,400 16,130 $ 3,800 1,200 12,800 9,800 14,800 Total Liabilities and Stockholders' Equity $57,730 $ 42,400 CONSULTEX, INC. Income Statement For the Year Ended October 31 2015 Sales Revenue $162,000 Salaries and Wages Expense 98,800 Rent Expense 36,800 Utilities Expenses 20,500 2014 $ 165,000 97,800 30,800 20,800 Income before Income Tax Expense Income Tax Expense 5,900 1,770 15,600 4,680 Net Income $ 4,130 $ 10,920