Question 1 The net changes in the statement of financial position accounts of Black Beauty calendar year 2014 are shown below: Account Debit Cash....... $ 62,800 Accounts receivable...... $ Allowance for doubtful accounts.. Inventory... 108,600 Prepaid expenses... 10,000 Long-term investments.... Land ..... 150,000 Buildings..... 300,000 Machinery...... 50,000 Office equipment...... Accumulated depreciation: Buildings...... Machinery..... Office equipment....... 6,000 Accounts payable........ 91,600 Accrued liabilities...... Dividends payable....... Bonds payable........ Preferred shares.. 30,000 Common shares...... Retained earnings.... 43.600 $852,600 Additional information: 1. Net income for the year was $70,000. 2. Cash dividends of $64,000 were declared December 15, 2014, payable January A 5% common stock dividend was issued March 31, 2014, when the market $22.00 per share. At the time there were 36,000 common shares outstanding. 3. The long-term investments were sold for $70,000. 4. A building which had cost $240,000, with a book value of $150,000, was sold for and a new one was purchased. 5. The following entry was made to record an exchange of an old machine for a new Machinery....... 80,000 Accumulated Depreciation-Machinery...... 20,000 Machinery....... Cash....... 6. A fully depreciated copier machine, which cost $14,000, was written off. 7. Preferred shares originally issued for $30,000 were redeemed for $40,000