For December 31, 2015, the balance sheet of Broccoli Corporation was as follows:

Sales for 2016 were $230,000, and the cost of goods sold was 60 percent of sales. Selling and administrative expense was $23,000. Depreciation expense was 10 percent of plant and equipment (gross) at the beginning of the year. Interest expense for the notes payable was 12 percent, while the interest rate on the bonds payable was 14 percent. This interest expense is based on December 31, 2015 balances. The tax rate averaged 30 percent. $2,200 in preferred stock dividends were paid and $3,836 in dividends were paid to common stockholders. There were 10,000 shares of common stock outstanding. During 2016, the cash balance and prepaid expenses balances were unchanged. Accounts receivable and inventory increased by 12 percent. A new machine was purchased on December 31, 2016, at a cost of $37,000. Accounts payable increased by 30 percent. Notes payable increased by $6,200 and bonds payable decreased by $11,000, both at the end of the year. The preferred stock, common stock, and capital paid in excess of par accounts did not change.

a. Prepare an income statement for 2016.

b. Prepare a statement of retained earnings for 2016. c. Prepare a balance sheet as of December 31, 2016.

Current Assets Cash Accounts receivable Inventory Prepaid expenses Fixed Assets Gross plant and equipment Less: Accumulated depreciation Net plant and equipment Total assets Liabilities 12,000 Accounts payable 17,000 Notes payable 27,000 Bonds payable 12,200 Stockholders' Equity 252,000 Preferred stock 50,400 Common stock Paid in Capital 201.600 Retained earnings 269,800 Total liabilities and stockholders' equity 14,000 22,000 52,000 22,000 57,000 27,000 75.800 269, 800