Exercise 23-14 Teal Inc., a greeting card company, had the following statements prepared as of December 31, 2017 TEAL INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 12/31/16 $6,100 62,400 Cash Accounts receivable Short-term debt investments (available-for-sale 34,700 18,100 Inventory Prepaid rent Equipment Accumulated depreciation-equipment Copyrights Total assets $7,100 51,000 60,300 4,000 154,100 130,600 40,400 4,900 (34,900) (24,800) 46,400 $314,100 49,800 $296,100 Accounts payable Income taxes payable Salaries and wages payable Short-term loans payable Long-term loans payable Common stock, $10 par Contributed capital, common stock Retained earnings Total liabilities & stockholders' equity $46,500 $40,200 6,000 4,100 10,100 68,400 100,000 100,000 30,000 37,300 $314,100 $296,100 4,000 8,100 7,900 59,600 30,000 58,000 TEAL INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017 Sales revenue Cost of goods sold Gross profit Operating expenses Operating income Interest expense Gain on sale of equipment Income before tax Income tax expense Net income $339,800 176,500 163,300 120,500 42,800 $11,300 2,000 9,300 33,500 6,700 $26,800 Additional information: 1. Dividends in the amount of $6,100 were declared and paid during 2017 2. Depreciation expense and amortization expense are included in operating expenses. 3. No unrealized gains or losses have occurred on the investments during the year. 4. Equipment that had a cost of $20,100 and was 70% depreciated was sold during 2017