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Case study on financial statements

Case study on financial statements

Problem 12-7A

Presented below are the financial statements of Bonita Industries.

Bonita Industries
Comparative Balance Sheets
December 31
Cash$ 40,600$ 23,200
Accounts receivable23,20016,240
Property, plant, and equipment69,60090,480
Accumulated depreciation(37,120)(27,840)
Liabilities and Stockholders’ Equity
Accounts payable$ 22,040$ 17,400
Income taxes payable8,1209,280
Bonds payable19,72038,280
Common stock20,88016,240
Retained earnings58,00044,080
Bonita Industries
Income Statement
For the Year Ended December 31, 2017
Sales revenue$280,720
Cost of goods sold203,000
Gross profit77,720
Selling expenses$20,880
Administrative expenses6,96027,840
Income from operations49,880
Interest expense3,480
Income before income taxes46,400
Income tax expense9,280
Net income$ 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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