Jacoby Corporation, a merchandiser, recently completed its calendar year 2016 operations. For the year:

? All sales are credit sales

? All credits to Accounts Receivable reflect cash receipts from customers

? All purchases of inventory are on credit

? All debits to Accounts Payable reflect cash payments for inventory

? Other expenses are paid in advance and are initially debited to Prepaid Expenses.

? The companys balance sheets and income statement follow.

Additional Information on Year 2011 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 $20,850, for $28,050 cash.

c. Purchased equipment costing $113,250 by paying $38,250 cash and signing a long-term note

payable for the balance.

d. Borrowed $6,000 cash by signing a short-term note payable.

e. Paid$45,000cashtoreducethelong-termnotespayable.

f. Issued 3,000 shares of common stock for $11 cash per share.

g. Declaredandpaidcashdividendsof$63,000.

Jacoby Corporation Balance Sheet December 31, 2015 and 2016 2016 2015 Assets Cash Accounts receivable Merchandise invento Prepaid expenses Equipment Accumulated depreciation Total Assets $136,500 74,100 454,500 17,100 278,250 (108,750 $851,700 $71,550 90,750 490,200 19,200 216,000 (93,000 $794,700 Liabilities Accounts payable Short-term notes payable Long-term notes pavable Common stock, $5 par Paid in capital in excess Retained earnings TOTAL Liabilities $117,450 17,250 112,500 465,000 18,000 121,500 $851,700 $123,450 11,250 82,500 450,000 127,500 $794,700 Jacoby Corporation Income Statement December 31, 2016 Sales Cost of goods sold Gross profit Operating Expenses $1,083,000 585,000 498,000 $36,600 392,850 Depreciation expense Other expenses Total operating expenses 429,450 68,550 Gain and losses Loss on sale of equipment Income before taxes Income tax expense Net income 2,100 66,450 9,450 57,000