Statement of Earnings Sales revenue Cost of sales Gross margin Operating expenses and interest expense Earnings before income taxes Income tax expense Net earnings Statement of Financial Position Cash Accounts receivable (net) Inventory Property, plant, and equipment (net) Current liabilities (no interest) Non-current liabilities (10% interest) Common shares (6,000 shares) Retained earningst Year 2 $336,240* $285,000 285,560 241,000 50,680 44,000 33,460 30, 200 17,220 5,510 $ 11,710 $ 4,380 18,280 52,460 34,270 $109,390 Year 1 $ 12,550 39,830 30,000 27,010 $109,390 13,800 4,200 $ 9,600 $ 8,800 22,000 46,000 29,000 $105,800 $ 15,200 38,800 30,000 21,800 $105,800 *One-third was credit sales. +During Year 2, cash dividends amounting to $6,500 were declared and paid.

'One-third was credit sales. During Year 2 , cash dividends amounting to $6,500 were declared and paid