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The Hanks Company has the following income statement for the year ended December 31, 2006: Subscription revenue $250,00 Interest revenue on municipal bonds 4,500
The Hanks Company has the following income statement for the year ended December 31, 2006: Subscription revenue $250,00 Interest revenue on municipal bonds 4,500 Total revenues 254,500 Expenses: Subscription costs 120,000 Wages 30,000 Rent expense 15,000 Depreciation on equipment 45,000 Insurance expense 8,000 Total expenses Income before tax 218,000 36,500 Hanks Company has the following partially completed comparative balance sheets as of December 31: Assets Cash Tax refund receivable Prepaid rent Prepaid insurance Municipal bonds: Cost and fair value 2006 2005 $92,775 $ 10,000 19,250 19,250 3,000 2,800 2,500 3,200 50,000 50,000 Interest receivable 2,250 1,125 Equipment (net) 45,000 90,000 Deferred tax asset - noncurrent 2222 26,825
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