Income Statement For years ended December 31, 2017 and 2018 Comparative Balance Sheets 2018 December 31, 2018 and 2017 2017 Change 2018 Sales (all on credit) Cost of goods sold Gross margin 2017 $572,000 $515,000 (333,000) (273,000) 239,000 242,000 Current assets: Cash $119,980 $87,900 $32,080 Accounts receivable (net) 34,000 28,000 6,000 Inventory 53,000 50,000 3,000 Prepaid expenses 1,400 3,100 -1,700 Depreciation expense Other operating expenses 36,000 51,000 122,000 101,000 Other current assets 1,970 3.000 -1,030 Total current assets 210,350 172,000 38,350 Total operating 158,000 152,000 expenses Operating income 81,000 90,000 Long-term Investments 75,000 52,000 23,000 Other income Plant assets 302,000 253,000 49,000 (expenses) Interest expense Less: accumulated (5,300) (3,900) (76,800) (51,000) 25,800 depreciation Gain on sale of 5,900 4,100 Total plant assets 225,200 202,000 23,200 investments Loss on sale of plant (3.100) (3.700) Total assets 510,550 426,000 84,550 assets Total other income (14,300) (3,500) (expenses) Income before income taxes 78,500 86,500 Income taxes expense (23,550) (25,950) Net income $54,950 $60,550 Current liabilities: Accounts payable Accrued liabilities Income taxes payable $33,300 $34,000 $-700 2,400 2,000 400 1,900 7,000 -5,100 Total current liabilities 37,600 43,000 -5,400 W. Montanez Inc. Statement of Retained Earnings For the year ended December 31, 2018 Long term liabilities: Notes Payable 263,000 195,000 68,000 Total liabilities 300,600 238,000 62,600 2018 2017 Ret. earnings, Jan. 1 Add: net income Deduct: Dividends $38,000 54,950 60,550 (33,000) (22,550) $0 Stockholders' equity Common stock, $5 par 120,000 120,000 value Additional paid-in capital 30,000 30,000 0 Increase in retained earnings 21,950 38,000 Retained earnings 59.950 38,000 21,950 Ret. earnings, Dec. 31 $59,950 $38,000 Total stockholders' equity 209,950 188,000 21,950 Total liabilities and $510,550 $426,000 $84,550 stockholders' equity