The comparative balance sheet of Posner Company, for 2011 and the preceding year ended December 31, 2010, appears below in condensed form: PREPAREA CASH OUT FLOW USING THE DIRECT AND INDIRECT METHOD Year 2011 Year 2010 Cash 53,000 $ $ 50,000 Accounts receivable (net) 37,000 48,000 Inventories 108,500 100,000 Investments .... 70,000 Equipment 573,200 450,000 Accumulated depreciation-equipment(142,000) (176,000) TOTTAL ASSETS $629,700 $542,000 Accounts payable $ 62,500 $ 43,800 Bonds payable, due 2011 .... 100,000 Common stock, $10 par 325,000 285,000 Paid-in capital in excess of par CS 80,000 55,000 Retained earnings 162,200 58,200 TOTTAL LIAB+ OE $629,700 $542,000 The income statement for the current year is as follows: Sales $625,700 Cost of merchandise sold 340,000 Gross profit $285,700 Operating expenses: Depreciation expense $26,000 Other operating expenses 68,000 94,000 Income from operations $191,700 Other income: Gain on sale of investment $ 4,000 Interest expense 6,000 (2000) Income before income tax $189,700 Income tax 60,700 Net income $129,000 Additional data for the current year are as follows: (a) Fully depreciated equipment costing $60,000 was scrapped, no salvage, and equipment was purchased for $183,200. (b) Bonds payable for $100,000 were retired by payment at their face amount. (c) 5,000 shares of common stock were issued at $13 for cash. (d) Cash dividends declared and paid, $25,000.
The comparative balance sheet of Posner Company, for 2011 and the preceding year ended December 31, 2010, appears below in condensed form: PREPAREA CASH OUT FLOW USING THE DIRECT AND INDIRECT METHOD Year 2011 Year 2010 Cash 53,000 $ $ 50,000 Accounts receivable (net) 37,000 48,000 Inventories 108,500 100,000 Investments .... 70,000 Equipment 573,200 450,000 Accumulated depreciation-equipment(142,000) (176,000) TOTTAL ASSETS $629,700 $542,000 Accounts payable $ 62,500 $ 43,800 Bonds payable, due 2011 .... 100,000 Common stock, $10 par 325,000 285,000 Paid-in capital in excess of par CS 80,000 55,000 Retained earnings 162,200 58,200 TOTTAL LIAB+ OE $629,700 $542,000 The income statement for the current year is as follows: Sales $625,700 Cost of merchandise sold 340,000 Gross profit $285,700 Operating expenses: Depreciation expense $26,000 Other operating expenses 68,000 94,000 Income from operations $191,700 Other income: Gain on sale of investment $ 4,000 Interest expense 6,000 (2000) Income before income tax $189,700 Income tax 60,700 Net income $129,000 Additional data for the current year are as follows: (a) Fully depreciated equipment costing $60,000 was scrapped, no salvage, and equipment was purchased for $183,200. (b) Bonds payable for $100,000 were retired by payment at their face amount. (c) 5,000 shares of common stock were issued at $13 for cash. (d) Cash dividends declared and paid, $25,000.
