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Santa Corporation Income Statement For the Year Ended October 31, 2018 Sales Cost of goods sold Gross margin Operating expenses (including depreciation expense of $44,000)

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Santa Corporation Income Statement For the Year Ended October 31, 2018 Sales Cost of goods sold Gross margin Operating expenses (including depreciation expense of $44,000) Income from operations S2,050,000 1439.300 S610,700 535.370 S75,330 S12,000 Gain on sale of equipment Interest expense Income before income taxes Income taxes expense Net income (23.200 (11200 S64,130 40.330 $23.800 Santa Corporation Comparative Balance Sheets October 31, 2018 and 2017 2018 2017 Assets: Cash S175,400 $50,000 165,200 200,000 344,000 425,000 Accounts receivable (net) Merchandise inventory Prepaid rent 8,000 148,400 144,000 39.200) (24.000) Equipment Accumulated depreciation, equipment Total assets Liabilities and Stockholders' Equity Accounts payable Income taxes payable S138,400 $175,400 Notes payable (long-term) Bonds payable Preferred stock, $10 par value 6,400 50,000 4,400 20,000 100,000 240,000 181,440 200,000 200,000 Additional paid-in capital Retained earnings Total liabilities and stockholders' equity 121,440 85.56076.760 During 2018, Santa Corporation engaged in the below transactions: 1) Sold at a gain of $12,000, equipment that cost $35,600, on which it had accumulated depreciation of $28,800. 2) Purchased equipment in the amount of $40,000. 3) Paid a $20,000 note payable and borrowed $50,000 on a new note. 4) Converted bonds payable in the amount of s100,000 into 4,000 shares of preferred stock. 5) Declared and paid S15,000 in cash dividends. Required: Using the indirect method, prepare a statement of cash flows for Santa Corporation. Include a (10 Points) Santa Corporation Comparative Balance Sheets October 31, 2018 and 2017 Assets: Cash 2018 2017 Accounts receivable (net) S 175,400 $ 50,000 165,200 200,000 Merchandise inventory 44,000 425,000 Prepaid rent 3,000 148,400 144,000 S 801800 S 798,000 138,400 S 175,400 8,000 Equipment Accumulated depreciation, equipment Total assets Liabilities and Stockholders' Equity Accounts payable Income taxes payable Notes payable (long-term) Bonds payable Preferred stock, $10 par value (24,000) 6,400 50,000 100,000 240,000 181,440 4,400 20,000 200,000 200,000 121,440 dditional paid-in capital 85,5607:700 tained earnings tal liabilities and stockholders' equity S 801.800 $ 798,000

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