Question

For December 31, 20XX, the balance sheet of the Gardner Corporation is as follows 

Balance Sheet Liabilities Current Assets $19,200 Accounts payable 10,000 Notes payable 28,000 Bonds payable 14,300 Cash $16,100 25,500 50,600 Accounts receivable Inventory Prepaid expenses Capital Assets Shareholders' Equity $75,000 132,900 Plant and equipment (gross) Less: Accumulated amortization $283,000 54,400 Retained earnings Common stock Net plant and equipment 228,600 Total assets $300,100 Total liabilities and shareholders' equity $300,100 

Sales for 20XY were $302,000, with cost of goods sold being 66 percent of sales. Amortization expense was 17 percent of plant and equipment (net) at the beginning of the year. Interest expense for the bonds payable was 13 percent, while interest on the notes payable was 18 percent. These are based on December 31, 20XX, balances. Selling and administrative expenses were $27600, and the tax rate averaged 18 percent.

 During 20XY, the cash balance and prepaid expense balance were unchanged. Accounts receivable and inventory each increased by 19 percent, and accounts payable increased by 25 percent. A new machine was purchased on December 31, 20XY, at a cost of $35,000. A cash dividend of $13,000 was paid to common shareholders at the end of 20XY. Also, notes payable increased by $3,992 and bonds payable decreased by 12,200. The common stock account did not change.

a. Prepare an income statement for 20XY. (Input all answers as positive values.) 

b. Prepare a balance sheet as of December 31, 20XY.

c. Prepare a statement of cash flows for the year ending December 31, 20XY.

Answer 1