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The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows: 1 Dec. 31, 20Y8 Dec. 31, 20Y7

The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows:

1

Dec. 31, 20Y8

Dec. 31, 20Y7

2

Assets

3

Cash

$80,000.00

$100,000.00

4

Accounts receivable (net)

275,000.00

300,000.00

5

Merchandise inventory

510,000.00

400,000.00

6

Prepaid expenses

15,000.00

10,000.00

7

Equipment

1,070,000.00

750,000.00

8

Accumulated depreciation

(200,000.00)

(160,000.00)

9

Total assets

$1,750,000.00

$1,400,000.00

10

Liabilities and Stockholders' Equity

11

Accounts payable (merchandise creditors)

$100,000.00

$90,000.00

12

Mortgage note payable

0.00

400,000.00

13

Common stock, $10 par

600,000.00

200,000.00

14

Paid-in capital: Excess of issue price over parcommon stock

300,000.00

100,000.00

15

Retained earnings

750,000.00

610,000.00

16

Total liabilities and stockholders' equity

$1,750,000.00

$1,400,000.00

Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows:

A.Net income, $190,000.B.Depreciation reported on the income statement, $115,000.C.Equipment was purchased at a cost of $395,000, and fully depreciated equipment costing $75,000 was discarded, with no salvage realized.D.The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty.E.40,000 shares of common stock were issued at $15 for cash.F.Cash dividends declared and paid, $50,000.

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