$ 40,000 (23,000) $17,000 Sales (nef Cost of goods sold Gross profit Operating expenses: Selling expenses Administrative expenses Total operating expenses Pretax operating income Other items: $8,800 4,210 (13,010) $ 3,990 Interest revenue Rent revenue $ 40 300 Interest expense Income before income taxes (330) 10 $ 4,000 700) 3,300 0.41 Income tax expense Net income Earnings per share (8,000 shares) Shown next is the Schultz Company trial balance as of June 30, 2019: Debit Credit Cash Accounts Receivable (net) Note Receivable (due 9/1/19) Inventory Prepaid Insurance Property and Equipment Accumulated Depreciation Accounts Payable Dividends Payable Unearned Rent $ 7,200 10,300 4,000 24,400 960 80,000 $ 20,000 8,000 3,200 1,800 12,000 Bonds Payable, 10% (due 1/1/2024) Discount on Bonds Payable Common Stock, $1 par Additional Paidin Capital on Common Stock Retained Earnings Sales (nef Cost of Goods Sold Selling Expenses Administrative Expenses 600 8,000 34,580 26,400 90,000 48,600 19,750 8,170 $203,980 $203,980 Additional information: 1. The company uses a perpetual inventory system. 2. The company uses control accounts for selling and administrative expenses. 3. The company records and posts its adjusting entries to its accounts only at year-end. 4. Uncollectible accounts average 0.5% of net sales. 5. The $4,000 note receivable was received on March 1, 2019. The 6-month note carries an annual interest rate of 12%, the interest to be collected at the maturity date. 6. The balance in the Prepaid Insurance account represents payment made on January 1, 2019, for a 1-year comprehensive insurance policy. 7. The Property and Equipment account consists of land, $5,000; buildings, $55,000; and equipment, $20,000. The buildings are being depreciated over a 25-year life; the equipment over an 8-year life. Straight-line depre- ciation is used; residual value is disregarded. No acquisitions have been made in 2019. The depreciation on the buildings is treated as an administrative expense; depreciation on the equipment as a selling expense. 8. On February 1, 2019, the company rented some floor space to another company, receiving 1 year's rent of $1,800 in advance. 9. The bonds pay interest semiannually on January 1 and July 1. Straight-line amortization of the discount is recorded at the end of cach year. 10. The company estimates that its pretax income for the second half of 2019 will total $11,550. All items in income are subject to the same income tax rate schedule. The income tax rate schedule is 15% on the first $20,000 of taxable income and 30% on the excess. There is no difference between the company's pretax finan- cial income and taxable income, and no tax credits are available. The company rounds its estimated effective income tax rate to the nearest tenth of a percent. Income taxes will be paid during the first quarter of 2020. 11. On June 29, 2019, the company had declared and recorded (directly in Retained Earnings) a semiannual div- idend of $0.40 per share, payable on August 3, 2019. 12. The 8,000 shares of common stock have been outstanding the entire 6 months of 2019.