Reference no: EM132470655

For December 31, 20XX, the balance sheet of the Gardner Corporation is as follows:

Balance Sheet  Current Assets

Liabilities

Cash                                     $19,000

Accounts payable                   $12,100

Accounts receivable                20,000

Notes payable                        22,700

Inventory                              32,300

Bonds payable                         57,800

Prepaid expense                      18,500

Capital Assets

Shareholders' Equity

Plant and equipment (gross)             $299,000

Common stock                              $75,000

Less: Accumulated amortization          54,600

Retained earnings                            166,600

Net plant and equipment                   244,400

Total assets                                    $334,200

Total liabilities and shareholders' equity   $334,200

• Sales for 20XY were $303,000, with cost of goods sold being 64 percent of sales. Amortization expense was 11 percent of plant and equipment (net) at the beginning of the year. Interest expense for the bonds payable was 15 percent, while interest on the notes payable was 17 percent. These are based on December 31, 20XX, balances. Selling and administrative expenses were $30,600, and the tax rate averaged 18 percent.

• During 20XY, the cash balance and prepaid expense balance were unchanged. Accounts receivable and inventory each increased by 19 percent, and accounts payable increased by 26 percent. A new machine was purchased on December 31, 20XY, at a cost of $28,500. A cash dividend of $22,400 was paid to common shareholders at the end of 20XY. Also, notes payable increased by $8,792 and bonds payable decreased by 10,020. The common stock account did not change.

Question a. Prepare an income statement for 20XY. (Input all answers as positive values.)