December 31 Current Year Prior Year Assets Cash Accounts receivable, net Inventory Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Salaries payable Total current liabilities Equity Common stock, no par value Retained earnings $ 30,400 10,050 $ 30,550 12,150 90,100 70,150 130,550 112,850 49,900 41,500 (22,500) (15,300) $157,950 $139,050 $ 23,900 25,400 500 24,400 600 26,000 110,000 100,000 23,550 13,050 Total liabilities and equity $157,950 $139,050 MONTGOMERY INC. Income Statement For Current Year Ended December 31 Sales $ 45,575 Cost of goods sold (18,950) Gross profit 26,625 Operating expenses Depreciation expense $ 7,200 Other expenses 5,550 Total operating expense 12,750 Income before taxes 13,875 Income tax expense 3,375 Net income $ 10,500