DIRECT Method
RichCorp
Income Statement
FYE 12/31/19
Revenues		445,000.00
Cost of Goods Sold	(232,500.00)
Operating Expenses	(110,500.00)
Interest Expense	(6,000.00)
Loss on sale of equipment	(1,000.00)	(350,000.00)
Income before income taxes		95,000.00
Income tax expense		(32,500.00)
Net Income		62,500.00
COMPARATIVE BALANCE SHEET
		12/31/2019	12/31/2018
Cash		27,000	18,500.00
Accounts Receivable		34,000	13,000.00
Inventory		27,000	-
Prepaid Insurance		2,000	3,000.00
Land		22,500	35,000.00
Buildings		100,000	100,000.00
Equipment		96,500	34,000.00
		309,000	203,500.00
Accumulated Depreciation, Buildings		10,500	5,500.00
Accumulated Depreciation, Equipment		14,000	5,000.00
Accounts Payable		16,500	20,000.00
Bonds Payable		55,000	75,000.00
Common Stock ($1 par)		110,000	30,000.00
Retained Earnings		103,000	68,000.00
		309,000	203,500.00

Additional Information relating to 2019 activities:
Cash dividends of $27,500 were declared and paid
Equipment costing $20,500 and having a carrying value of $18,000, was sold for $17,000 cash
Equipment with a cost of $83,000 was purchased for cash
Operating expenses include depreciation expense of $16,500 and amortization of prepaid expenses of $1,000
Land was sold at its book value for cash
Interest expense of $6,000 was paid in cash
Common stock was issued for cash
Inventory was purchased on credit
Assume operating expenses are paid in cash

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