Problem 1:

Shown below is information relating to operations of Kravitz, Inc. for the year ended 2019:

Continuing operations: Net sales $7,550,000 Cost and expenses (including income taxes) $4,930,000 Other data: Current-year loss generated by segment of the business discontinued in May (net of income taxes) $272,300 Gain on disposal of discontinued segment (net of income taxes) $564,800 Prior-period adjustment (decrease in prior years' income net of tax benefit) $287,200 Extraordinary loss (net of income tax benefit) $423,000 Cash dividends declared $680,000Purchases of marketable securities $107,000 Proceeds from sales of marketable securities $152,000 Interest and dividends received $81,800 Interest paid $56,200 Taxes paid $75,500 Dividends paid $39,500 Proceeds from short-term borrowing $161,500 Payments to settle short-term debts (principal repaid) $98,500 Cash received from customers $841,000 Cash paid to suppliers and employees $513,000 Proceeds from issuing capital stock $818,000 Purchases of plant assets $528,000 Proceeds from sales of plant assets $488,000 Cash and cash equivalents, beginning of year $139,500