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The comparative balance sheets and income statements for Gypsy Company follow: Balance Sheets As of December 31 Year 2 Year 1 Assets Cash $ 32,500
The comparative balance sheets and income statements for Gypsy Company follow:
Balance Sheets As of December 31 | ||||||||
Year 2 | Year 1 | |||||||
Assets | ||||||||
Cash | $ | 32,500 | $ | 16,300 | ||||
Accounts receivable | 4,750 | 2,800 | ||||||
Inventory | 11,200 | 9,800 | ||||||
Equipment | 45,000 | 52,000 | ||||||
Accumulated depreciationequipment | (17,800 | ) | (21,800 | ) | ||||
Land | 28,000 | 12,000 | ||||||
Total assets | $ | 103,650 | $ | 71,100 | ||||
Liabilities and equity | ||||||||
Accounts payable (inventory) | $ | 3,750 | $ | 4,900 | ||||
Long-term debt | 5,800 | 7,800 | ||||||
Common stock | 47,000 | 25,000 | ||||||
Retained earnings | 47,100 | 33,400 | ||||||
Total liabilities and equity | $ | 103,650 | $ | 71,100 | ||||
Income Statement For the Year Ended December 31, Year 2 | ||||
Sales revenue | $ | 61,200 | ||
Cost of goods sold | (24,500 | ) | ||
Gross margin | 36,700 | |||
Depreciation expense | (12,000 | ) | ||
Operating income | 24,700 | |||
Gain on sale of equipment | 1,500 | |||
Loss on disposal of land | (100 | ) | ||
Net income | $ | 26,100 | ||
Additional Data
- During Year 2, the company sold equipment for $21,500; it had originally cost $36,000. Accumulated depreciation on this equipment was $16,000 at the time of the sale. Also, the company purchased equipment for $29,000 cash.
- The company sold land that had cost $6,000. This land was sold for $5,900, resulting in the recognition of a $100 loss. Also, common stock was issued in exchange for title to land that was valued at $22,000 at the time of exchange.
- Paid dividends of $12,400.
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