Problem 2 (25 points) Use the following financial statements to answer the questions on the following...

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Problem 2 (25 points) Use the following financial statements to answer the questions on the following page So Extra, Inc. Income Statement For the Year Ended December 31, 2017 Revenues Gain on sale of Land $4,400,000 15,000 Expenses: Cost of Goods Sold 2,800,000 Operating Expenses 650,000 Depreciation Expense 75,000 Income Tax Expense 280,000 Total Expenses Net Income 3,805,000 $610,000 So Extra, Inc. Balance Sheet At December, 31, 2017 Assets 2017 2016 Current Assets: Cash $50,000 $30,000 Accounts Receivable 65,000 80,000 Inventory 110,000 90,000 Long-Term Assets Land 150,000 200,000 Equipment 650,000 440,000 Accumulated Depreciation (155,000) (80,000) Total Assets $870,000 $760,000 Liabilities and Stockholders' Equity Current Liabilities: Accounts Payable $37,500 $55,000 Interest Payable 27,500 5,000 Income Tax Payable Long-Term Liabilities: Notes Payable Stockholder's Equity Common Stock Retained Earnings 15,000 20,000 100,000 200,000 280,000 280,000 410,000 200,000 Total Liabilities and Equity $870,000 $760,000 Additional information for 2017 (Assume the indirect method is used to calculate operating cash flows) 1. Sold land costing $50,000 for $65,000, resulting in a gain on sale of $15,000. 2. Purchased equipment for $210,000 cash 3. Repaid $100,000 in notes payable at the beginning of the year. 4. Declared and paid a cash dividend of $400,000 Problem 2 (25 points) Use the following financial statements to answer the questions on the following page So Extra, Inc. Income Statement For the Year Ended December 31, 2017 Revenues Gain on sale of Land $4,400,000 15,000 Expenses: Cost of Goods Sold 2,800,000 Operating Expenses 650,000 Depreciation Expense 75,000 Income Tax Expense 280,000 Total Expenses Net Income 3,805,000 $610,000 So Extra, Inc. Balance Sheet At December, 31, 2017 Assets 2017 2016 Current Assets: Cash $50,000 $30,000 Accounts Receivable 65,000 80,000 Inventory 110,000 90,000 Long-Term Assets Land 150,000 200,000 Equipment 650,000 440,000 Accumulated Depreciation (155,000) (80,000) Total Assets $870,000 $760,000 Liabilities and Stockholders' Equity Current Liabilities: Accounts Payable $37,500 $55,000 Interest Payable 27,500 5,000 Income Tax Payable Long-Term Liabilities: Notes Payable Stockholder's Equity Common Stock Retained Earnings 15,000 20,000 100,000 200,000 280,000 280,000 410,000 200,000 Total Liabilities and Equity $870,000 $760,000 Additional information for 2017 (Assume the indirect method is used to calculate operating cash flows) 1. Sold land costing $50,000 for $65,000, resulting in a gain on sale of $15,000. 2. Purchased equipment for $210,000 cash 3. Repaid $100,000 in notes payable at the beginning of the year. 4. Declared and paid a cash dividend of $400,000