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Condensed financial data of Cheng Inc. follow.
Cheng Inc.
Comparative
December 31
Assets 2020 2019
Cash $ 80,800 $ 48,400
Inventory 117,500 102,850
Prepaid expenses 28,400 26,000
Investments 143,000 114,000
Equipment 270,000 242,500
equipment
Total $ 682,500 $ 514,750
Liabilities and
Accounts payable $ 112,000 $ 67,300
Accrued expenses payable 16,500 17,000
Bonds payable 110,000 150,000
Common stock 220,000 175,000
Total $ 682,500 $ 514,750
Cheng Inc.
Income Statement
For the Year Ended December 31, 2020
Sales revenue $392,780
Less:
Cost of goods sold $135,460
Operating expenses, 12,410
excluding depreciation
Depreciation expense 46,500
Income tax expense 27,280
Interest expense 4,730
Loss on disposal of plant assets 7,500 233,880
Net income $158,900
Additional information:
- New equipment costing $85,000 was purchased for cash during the year.
- Old equipment having an original cost of $57,500 was sold for $1,500 cash.
- Bonds matured and were paid off at face value for cash.
- A cash dividend of $40,350 was declared and paid during the year.
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