ABC Company’s current financial information (before/without expansion)
Dec. 31,19X2Dec. 31,19X1
Cash$ 50,000$ 70,000
Accounts receivable (net)$ 120,000$ 180,000
Merchandise inventory$ 350,000$ 280,000
Property plant, & equipment$ 400,000$ 300,000
Less: Accumulated depreciation$ (170,000)$ (100,000)
Total assets$ 750,000$ 730,000
Accounts payable$ 250,000$ 210,000
Income taxes payable$ 40,000$ 10,000
Common stock$ 240,000$ 240,000
Retained earnings$ 220,000$ 270,000
Total liabilities & stock, equity$ 750,000$ 730,000
The firm’s accrual-basis income statement revealed the following data:
Sales$ 1,200,000
Cost of goods sold$ 800,000
selling and administrative expenses$ 250,000
Depreciation expense$ 70,000
Income taxes$ 30,000
Dividends declared and paid during 19X2$ 100,000
ABC purchased $10,000 of equipment for cash on August 14.
(There was no interest expense.)
