Mary, Inc. has prepared the following comparative balance sheets for 2020 and 2021: 2021 2020 Cash $ 310,200 $ 168,300 Accounts receivable 152,900 128,700 Inventory 165,000 198,000 Prepaid expenses 19,800 29,700 Plant assets 1,424,500 1,155,000 Accumulated depreciation (495,000) (412,500) Patents 168,300 191,400 $1,745,700 $1,458,600 Accounts payable $ 168,300 $ 184,800 Accrued liabilities 66,000 46,200 Martgage payable ― 495,000 Preferred stock 577,500 ― Additional paid-in capital—preferred 132,000 ― Common stock 660,000 660,000 Retained earnings 141,900 72,600 $1,745,700 $1,458,600 1. The Accumulated Depreciation account has been credited only for the depreciation expense for the period. 2. The Retained Earnings account has been charged for dividends of $151,800 and credited for the net income for the year. The income statement for 2021 is as follows: Sales revenue $2,178,000 Cost of sales 1,197,900 Gross profit 980,100 Operating expenses 759,000 Net income $ 221,100

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Mary, Inc. has prepared the following comparative balance sheets for 2020 and 2021:

	2021	2020
Cash	$ 310,200		$ 168,300
Accounts receivable	152,900		128,700
Inventory	165,000		198,000
Prepaid expenses	19,800		29,700
Plant assets	1,424,500		1,155,000
Accumulated depreciation	(495,000)	(412,500)
Patents	168,300		191,400
	$1,745,700		$1,458,600
Accounts payable	$ 168,300		$ 184,800
Accrued liabilities	66,000		46,200
Martgage payable	―		495,000
Preferred stock	577,500		―
Additional paid-in capital—preferred	132,000		―
Common stock	660,000		660,000
Retained earnings	141,900		72,600
	$1,745,700		$1,458,600

1.		The Accumulated Depreciation account has been credited only for the depreciation expense for the period.
2.		The Retained Earnings account has been charged for dividends of $151,800 and credited for the net income for the year.

The income statement for 2021 is as follows:
	Sales revenue	$2,178,000
	Cost of sales	1,197,900
	Gross profit	980,100
	Operating expenses	759,000
	Net income	$ 221,100

Statement of Cash Flows
Increase (Decrease) in Cash
$
Adjustments to reconcile net income to
$

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