Question 2 Buffalo Inc., a greeting card company, had the following statements prepared as of December 31, 2017. BUFFALO INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 12/31/16 $6,000 $7,100 50,900 Short-term debt investments (available-for-sale) 34,900 17,900 59,800 3,900 154,900129,200 Cash Accounts receivable 62,000 Inventory Prepaid rent Equipment Accumulated depreciation-equipment Copyrights Total assets 40,400 5,100 (34,900) (25,200) 46,200 49,500 $314,600 $293,100 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 liabilities & stockholders' equity $46,500 $40,100 6,100 3,900 10,000 69,200 100,000 100,000 30,000 33,800 $314,600 $293,100 4,000 8,000 8,100 60,600 30,000 57,400 BUFFALO INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017 Sales revenue Cost of goods sold Gross profit Operating expenses Operating income Interest expense Gain on sale of equipment Income before tax Income tax expense $340,125 174,600 165,525 119,000 46,525 $11,400 2,000 9,400 37,125 7,425