Question 1 Stellar Inc., a greeting card company, had the following statements prepared as of December 31, 2017 STELLAR INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 12/31/16 $6,100 $7,000 1,600 51500 34,900 18,100 9,900 60,400 Cash short-term debt investments available-for-sale) Prepaid rent 4,100 154,100 130,300 35,000) 24,900) 5,500 50,s0D Total assets $312,10D $297,000 Accounts payable Income taxes payable Salaries and wages payable Short-term loans payable Long term loans payable Common stock, $10 par Contributed capital, common stock Retained earnings Total llabilities & stockholders' equity 45,800 3,900 8,100 4000 7,900 10,000 60,500 63O0 00,000 100,000 30,000 30,000 55,800 37,80D $312,20D $297,000 STELLAR INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017 333,000 174,000 Cost of goods sold Gross profit Operating expenses Operating income Interest expense Gain on sale of equipment Income before tax Income tax expense Net income 119,500 1 1,500 9,500 30,000 6,000 $24,0D0 2,000 Additional information: 1 Dividends in the amount of $6,000 were declared and paid during 2017 2 Depreciation expense and amortization expense are included in operating expenses No unrealized gains or losses have occurred on the investments during the year 4. Equipment that had a cost of $20,100 and was 70% depreciated was sold during 2017