Problem 12-7APresented below are the financial statements of Bonita Industries. Bonita Industries
Comparative Balance Sheets
December 31 | | Assets | | 2017 | | | 2016 | | | Cash | | $ 40,600 | | | $ 23,200 | | | Accounts receivable | | 23,200 | | | 16,240 | | | Inventory | | 32,480 | | | 23,200 | | | Property, plant, and equipment | | 69,600 | | | 90,480 | | | Accumulated depreciation | | (37,120 | ) | | (27,840 | ) | | Total | | $128,760 | | | $125,280 | | | | | | | | | | Liabilities and Stockholders’ Equity | | | | | | | | Accounts payable | | $ 22,040 | | | $ 17,400 | | | Income taxes payable | | 8,120 | | | 9,280 | | | Bonds payable | | 19,720 | | | 38,280 | | | Common stock | | 20,880 | | | 16,240 | | | Retained earnings | | 58,000 | | | 44,080 | | | Total | | $128,760 | | | $125,280 | |
Bonita Industries
Income Statement
For the Year Ended December 31, 2017 | | Sales revenue | | | | $280,720 | | Cost of goods sold | | | | 203,000 | | Gross profit | | | | 77,720 | | Selling expenses | | $20,880 | | | | Administrative expenses | | 6,960 | | 27,840 | | Income from operations | | | | 49,880 | | Interest expense | | | | 3,480 | | Income before income taxes | | | | 46,400 | | Income tax expense | | | | 9,280 | | Net income | | | | $ 37,120 |
Additional data: | 1. | | Depreciation expense was $20,300. | | 2. | | Dividends declared and paid were $23,200. | | 3. | | During the year equipment was sold for $9,860 cash. This equipment cost $20,880 originally and had accumulated depreciation of $11,020 at the time of sale. |
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