Income Statement Sales Sales Discounts $ 2,780,900 Year 2 Balance Sheets Assets Year 1 Year 2 (75,300) Cash $ 157,800 $ 143,700 Sales Returns & Allowances (32,300) Accounts Receivable 178,400 144,400 Net Sales 2,673,300 Inventory 776,300 Cost of Goods Sold 1,659,800 Supplies 4,500 865,300 5,500 Gross Margin 1,013,500 Prepaid Insurance 5,500 7,500 Wages & Salaries Expense 427,600 Total Current Assets 1,122,500 1,166,400 Payroll Taxes Expense 17,600 Selling Expense 98,900 Building 40,000 55,500 Rent Expense 126,500 Insurance Expense 18,100 Accum Deprec- Building Equipment (24,000) (36,500) 8,500 12,500 Supplies Expense 5,200 Accum Deprec- Equipment (2,500) (5,400) Communications Expense 15,700 Property, Plant & Equipment 22,000 26,100 Utilities Expense 9,900 Deprec Expense - Building 12,500 Total Assets $ 1,144.500 $ 1,192,500 Deprec Expense - Equipment 2,900 Bad Debts Expense 2,300 Liabilities Total Expense 737,200 Accounts Payable 177,800 147,600 Operating Income 276,300 Salaries Payable 26,100 22,400 Other Income 8,700 Total Current Liabilities 203,900 170,000 Other Expense (25,200) Long Term Debt 390,000 320,000 Total Other (16,500) Total Liabilities 593,900 490,000 Income Before Taxes 259,800 Taxes (77,900) Owners' Equity Net Income 181.900 Paid-In Capital 200,000 200,000 Beginning Ret Earnings 265,100 350,600 Net Income 105,500 181,900 There was no disposal of PP&E during Year 2 Ending Ret Earnings Total Owners' Equity Distributions (20,000) (30,000) 350,600 502,500 550,600 702,500 There were purchases of PP&E during Year 2 *Cash dividends of $30,000 were paid in Year 2 Total Liabilities & Equity $ 1.144,500 $ 1.192.500