Gazelle Corporation, a merchandiser, recently completed its calendar-year 2017 operations. For the year. Problem 16-38 (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, Indirect Statement of (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for cash ftows inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The A1 P1 P2 P company's balance sheets and income statement follow GAZELLE CORPORATION Comparative Balance Sheets December 31, 2017 and 2016 2016 Assets Cash. Accounts receivable $123,450 61,550 77,100 80,750 240,600 250,700 15.10017.000 56,250 410,000 262,250 200,000 Prepaid expenses GAZELLE CORPORATION Income Statement For Year Ended December 31, 2017 Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term notes payable $607750 $515000 Sales $1,185.000 595,000 590.000 Cost of goods sold 17,750 $102,000 G Gross proft Opesating expenses 10,000 32,750 112.000 100,000 77,500 15,000 S 38.600 362.850 Other expenses.. Total operating expenses. ...1 401.450 188 550 Equity Other gains (losses 2.100 196,450 Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity 30,000 230,000125.500 $607.750 $515.000 28.350 S 158100 Net income Additional Information on Year 2017 Transactions a. The loss on the cash sale of equipment was $2,100 (details 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 note payable for the balance. d. Borrowed $5,000 cash by signing a short-term note payable e. Paid $47,500 cash to reduce the long-term notes payable. f. Issued 3,000 shares of common stock for $15 cash per share. g. Declared and paid cash dividends of $53,600