Income Statement Sales 2,780,900 Year 2 Balance Sheets Assets Year 1 Year 2 Sales Discounts (75,300) Cash $ 257,900 $ 399,800 Sales Returns & Allowances (32,300) Accounts Receivable 168,400 144,400 Net Sales 2,673,300 Inventory 776,300 865,300 Cost of Goods Sold 1,459,800 Supplies 4,500 5,500 Gross Margin 1,213,500 Prepaid Insurance 5,500 Wages & Salaries Expense 427,600 Total Current Assets 1,212,600 7,500 1,422,500 Payroll Taxes Expense 17,600 Selling Expense 98,900 Building Rent Expense 126,500 Accum Deprec- Building Insurance Expense 18,100 Equipment Supplies Expense 5,200 Accum Deprec Equipment Communications Expense 15,700 Property, Plant & Equipment 22,000 40,000 (24,000) 8,500 (2,500) 65,500 (36,500) 16,500 (5,400) 40,100 Utilities Expense 9,900 Deprec Expense - Building 12,500 Total Assets $ 1,234,600 $ 1,462,600 Deprec Expense - Equipment 2,900 Bad Debts Expense 2,300 Liabilities Total Expense 737,200 Accounts Payable 177,800 147,600 Operating Income 476,300 Salaries Payable 26,100 22,400 Other Income 8,700 Total Current Liabilities 203,900 170,000 Other Expense (25,200) Long Term Debt 390,000 300,000 Total Other (16,500) Total Liabilities 593,900 470,000 Income Before Taxes 459,800 Taxes (77,900) Owners' Equity Net Income 381,900 Paid-In Capital 200,000 200,000 Beginning Ret Earnings 255,100 440,700 Net Income 205,600 381,900 * * There was no disposal of PP&E during Year 2 There were purchases of PP&E during Year 2 Distributions (20,000) (30,000) Ending Ret Earnings 440,700 792,600 Total Owners' Equity 640,700 992,600 * Cash dividends of $30,000 were paid in Year 2 Total Liabilities & Equity $ 1,234,600 $ 1,462,600