ng information applies to the questions displayed below.]

The following transactions apply to Park Co. for 2016:

1.	Received $30,500 cash from the issue of common stock.
2.	Purchased inventory on account for $142,000.
3.	Sold inventory for $173,500 cash. Sales tax was collected at the rate of 6 percent on the inventory sold.
4.	Borrowed $18,000 from First State Bank on March 1, 2016. The note had a 6 percent interest rate and a one-year term to maturity.
5.	Paid the accounts payable (see transaction 2).
6.	Paid the sales tax due on $152,000 of sales. Sales tax on the other $21,500 is not due until after the end of the year.
7.	Salaries for the year for the one employee amounted to $29,000. Assume the Social Security tax rate is 6.20 percent and the Medicare tax rate is 1.45 percent. Federal income tax withheld was $5,000.
8.	Paid $2,600 for warranty repairs during the year.
9.	Paid $12,000 of other operating expenses during the year.
10.	Paid a dividend of $4,900 to the shareholders.

Adjustments:

11.	The products sold in transaction 3 were warranted. Park estimated that the warranty cost would be 4 percent of sales.
12.	Record the accrued interest at December 31, 2016.
13.	Record the accrued payroll tax at December 31, 2016. Assume no payroll taxes have been paid for the year and that the unemployment tax rate is 6.20 percent (federal unemployment tax rate is 0.60 percent and the state unemployment tax rate is 5.60 percent on the first $7,000 of earnings per employee)

c.

Prepare an income statement, statement of changes in stockholders equity, balance sheet, and statement of cash flows for 2016. (Statement of Changes in Stockholders Equity and Statement of Cash Flows only: Items to be deducted must be indicated with a minus sign.)

PARK CO.
Income Statement
For the Year Ended December 31, 2016
Expenses
Total operating expenses

PARK CO.
Statement of Changes in Stockholders Equity
For the Year Ended December 31, 2016
Total stockholders' equity

PARK CO.
Balance Sheet
As of December 31, 2016
Assets
Total assets
Liabilities
Total liabilities
Stockholders Equity
Total Stockholders equity
Total liabilities and stockholders equity

PARK CO.
Statement of Cash Flows
For the Year Ended December 31, 2016
Cash flows from operating activities:
Net cash flow from operating activities
Cash flows from investing activities
Cash flows from financing activities:
Net cash flow from financing activities
Net change in cash
Ending cash balance