Problem 12-07A

Presented below are the financial statements of Brothers Company

Splish Brothers Company Comparative Balance Sheets December 31 nssets 2022 2021 Cash $ 105,000 $ 60,000 accounts receivable 60,000 42,000 Inventory 04,000 60,000 Property, plant, and equipment 130.000 234,000 Accumulated depreciation (96,000) (22,000) Total $333,000 $324,000 Liabilities and Stockholders' Equity accounts payable $ 5?,000 $ 45,000 Income taxes payable 21,000 24,000 Bonds payable 51,000 99,000 Common stock 54,000 42,000 Retained earnings 150,000 114,000 Total $333,000 $324,000 Splish Brothers Company Income Statement For the Year Ended December 31. 2022 Sales revenue $726,000 Cost of goods sold 525,000 Gross profit 201,000 Selling expenses $54,000 .ldministratiye expenses 13.000 72,000 Income from operations 129,000 Interest expense 9,000 Income before income taxes 120,000 Income tax expense 24,000 Net income $ 96,000 Additional data: 1. Depreciation expense was $52,500. 2. Dividends declared and paid were $60,000. 3. During the year equipment was sold for $25,500 cash. This equipment cost $54,000 originally and had accumulated depreciation of $28,500 at the time of sale. Splish Brothers Company Statement of Cash Flows Adjustments to reconcile net income to