December 31 Assets Cash GAZELLE CORPORATION Comparative Balance Sheets Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum, depreciation-Equipment Total assets Liabilities and Equity Current Year Prior Year $123,450 $ 61,550 77,100 80,750 240,000 250,700 15,100 17,000 456,250 410,000 262,250 200,000 (110,750) (95.000) $607,750 $515,000 Accounts payable $ 17,750 $102,000 long-term notes payable 115,000 87,500 Total liabilities 132,750 189,500 Equity Common stock, $5 per 215,000 200,000 Paid-in capital in excess of par, common stock 30,000 0 Retained earnings 230,000 125,500 Total liabilities and equity $607,750 $515,000 GAZELLE CORPORATION Income Statement For Current Year Ended December 31 Sales $1,185,000 Cost of goods sold 595,000 Gross profit 590,000 Operating expenses (excluding depreciation) 302,850 Depreciation expense 38,000 188,550 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net Income (2,100) 180,450 28,350 $ 158,100 Additional Information on Current-Year Transactions a. The loss on the cash sale of equipment was $2,100 (detalls in b). b. Sold equipment costing $51,000, with accumulated depreciation of $22,850, for $26,050 cash. c. Purchased equipment costing $113,250 by paying $43,250 cash and signing a long-term notes payable for the balance. d. Paid $42,500 cash to reduce the long-term notes payable. e. Issued 3,000 shares of common stock for $15 cash per share. f. Declared and paid cash dividends of $53,600.