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The income statement and unclassified statement of financial position for Sandhill, Inc. follow: SANDHILL, INC. Statement of Financial Position December 31 Assets Cash Held for
The income statement and unclassified statement of financial position for Sandhill, Inc. follow: SANDHILL, INC. Statement of Financial Position December 31 Assets Cash Held for trading investments Accounts receivable Inventory Prepaid expenses Property, plant, and equipment Accumulated depreciation 2018 2017 $97,600 $48,000 130,000 114,000 75,500 40,000 123,100 94,500 18,800 27,200 278,500 254,000 (47,500) (52,000) $676,000 $525,700 Total assets Liabilities and Shareholders' Equity Accounts payable Accrued liabilities Bank loan payable Common shares Retained earnings $100,000 $75,700 7,200 60,000 175,300 260,000 155,000 244,000 112,500 Total liabilities and shareholders' equity $676,000 $525,700 12,000 SANDHILL, INC. Income Statement Year Ended December 31,2018 Sales Cost of goods sold Gross profit Operating expenses Income from operations Other revenues and expenses $571,200 189,300 381,900 116,480 265,420 Unrealized gain on held for trading investments $16,000 Interest expense Income before income tax Income tax expense Net income 4,780) 11,220 276,640 43,000 $233,640 Additional information: 1. 2. 3. 4. 5. 6. 7. 8. Prepaid expenses and accrued liabilities relate to operating expenses An unrealized gain on held for trading investments of $16,000 was recorded. New equipment costing $82,000 was purchased for $23,700 cash and a $58,300 long-term bank loan payable. Old equipment having an original cost of $57,500 was sold for $1,700. Accounts payable relate to merchandise creditors. Some of the bank loan was repaid during the year A dividend was paid during the year Operating expenses include $46,600 of depreciation expense and a $4,700 loss on disposal of equipment. Statement of Cash Flows-Direct Method Cash Payments by paying Note X to the Statement of Cash Flows: During the year, the company purchased equipment costing $ $23,700 cash and issuing a $58,300 bank loan payable
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