Task-Based Simulation 1 Situation Cord Corp., a nonpublic enterprise, requires audited financial statements for credit purposes. After making normal adjusting entries, but before closing the accounting records for the year ended December 31, year 2, Cord's controller prepared the following financial statements for year 2: Cord Corp. STATEMENT OF FINANCIAL POSITION December 31, year 2 Assets Cash $1,225,000 Marketable equity securities 125,000 Accumulated depreciation Accounts receivable Allowance for doubtful accounts Inventories Property and equipment Total assets 460,000 (55,000) 530,000 620,000 (280,000) $2.625.000 Liabilities and Stockholders' Equity: Accounts payable and accrued liabilities $1,685,000 Income tax payable 110,000 Common stock, $20 par 300,000 Additional paid-in capital 75,000 Retained earnings 455.000 Total liabilities and stockholders' equity $2,625,000 Cord Corp. Net sales Operating expenses: Cost of sales Selling and administrative Depreciation Total operating expenses Income before income tax Income tax expense Net income STATEMENT OF INCOME For the Year Ended December 31, year 2 $1,700,000 570,000 448,000 42.000 1,060,000 640,000 192,000 $448.000