question 1

Balance sheet data 2005 2004 Accounts receivable $ 36,000 $ 42,000 Inventories 28,000 25,000 Accounts payable 31,000 35,000 Salaries payable 2,000 1,000 Equipment 60,000 40,000 Accumulated depreciation 12,000 16,000 Bonds payable 50,000 100,000 Common stock 150,000 100,000 Retained earnings 38,000 20,000 Income statement data M Net sales $420,000 Cost of goods sold 300,000 Operating expenses (excluding depreciation expense) 84,000 Net income 30,000 Gain on sale of equipment (included in net income above) 2,000 35. Net cash provided from operating activities 2009 20:08 Assets Cash $29, 8:00 $15, 000 Accounts receivable* 28, 000 14,000 Inventory 30,000 35, 000 Property , plant and equipment 78,0.00 Accumulated depreciation 120,000 1 124, 000 ) Total 5127, 8:00 $1 18,000 Liabilities and Equity Accounts payable* 26, 0.00 25, 000 Dividends payable* 4, 0.010 Income tax payable* 5, 000 8.000 Debentures payable* 27,000 3.3, 0:00 Share capital 18,000 14, 0:00 Retained earnings 47, 8:00 3.8, 0.010 Total $127, 8:00 $1 18,0010 XYZLTD Income Statement for the year ended 31 December 20.09 Sales $ 260, 000 Cost of goods sold 210, 000 Gross profit 50, 0.00 Selling expense* 18,000 Administrative expenses* 6,000 Interest expense* 2,0.010 Profit before income tax* 24,00 0 Income tax expense 7, 200 Profit after tax 516, BODThe following additional data were provided* 1 . The entity paid an interim dividend of $ 3.090 and declared a final dividend . 2. During the year equipment was sold for $8. 500 cash . This equipment cost $18.000 originally and had a carrying amount of $8. 500 at the time of sale . 3. All depreciation expense is in the selling expense category* 4. All operating expenses except for depreciation were paid in cash