For December $31,20$X$1,$ the Balance sheet of Jerry Corporation was as follows:

Current assets Liabilities

Cash $250,000$ Accounts payable $1,200,000$

Accounts receivable $1,142,000$ Notes payable $1,000,000$

Inventory $1,582,000$ Bonds payable $3,069,000$

Prepaid expenses $170,000$

Fixed assets Stockholders$$ Equity

PPE $($Gross$)15,500,000$ Preferred stock $1,500,000$

Less: accumulated

depreciation

$4,875,000$ Common stock $3,000,000$

Net PPE $10,625,000$ Paid$-$in capital $1,000,000$

Retained earnings $3,000,000$

Total Assets $13,769,000$ Total liabilities and stockholders$$

equity

$13,769,000$

Sales for $20$X$2$ were $14,000,000,$ and the COGS was $55\%$ of sales. Administrative and

selling expenses were $110,000.$ Depreciation expense was $10\%$ of PPE $($Gross$)$ at the beginning of

the year. Interest rates are $8\%$ and $3\%$ for the notes payable and bonds payable, respectively. The

tax rate is $20\%.$

$$120,000$ in preferred stock dividends were paid, and $$275,000$ in dividends were paid to

common stockholders. There were $25,000$ shares of common stock outstanding.

During $20$X$2,$ the prepaid expenses balance is unchanged. Accounts receivable and

inventory increased by $15\%.$ A new machine was purchased on December $31,30$X$2$ at a cost of

$$1,500,000.$

Faculty of Business and Management

$7$

Accounts payable increased by $25$ percent. Notes payable increased by $$650,000$ and bonds

payable decreased by $$750,000,$ both at the end of the year. The preferred stock, common stock,

and paid$-$in capital in excess of par accounts did not change.

c$-$ Prepare a balance sheet as of December, $20$X$2.$