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Income statement | Sales $2200 Cost of good sold $1300 Gross profits $900 Selling and administrative expenses $420 Depreciation expenses $150 Operating income $330 Interest expense $90 Earnings before taxes $240 Taxes $80 Earnings after taxes $160 Preferred stock dividends $10 Earnings available to common stockholders $150 Shares outstanding $120 Earnings per share $1.25 STATEMENT OF RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 2020 Retained earnings, balance January 1st, 2020. $500 Add Earnings available to common $150 Deduct Cash dividends declared and paid $50 Retained earnings balance December 31st, 2020 $600 COMPARATIVE BALANCE SHEET FOR 2019 and 2020 YEAR END YEAR END 2019 2020 ASSETS Current assets: Cash $70 $100 Account receivable $300 $350 Inventory $410 $430 Prepaid expenses $50 $30 Total current assets $830 $910 Investments (LT securities) $80 $70 Plant and equipment $2000 $2400 Less accumulated depreciation $1000 $1150 Net plant and equipment $1000 $1250 Total assets $1910 $2230 LIABILITIES AND OWNERS EQUITY Current liabilities Account payable $250 $440 Notes payable $400 $400 Accrued expenses $70 $50 Total current liabilities $720 $890 Long term liabilities Bonds payable 2020 $70 $120 Total liabilities $790 $1010 Stockholders equity: Preferred stock $100 par value $90 $90 Common stock $1 par value $120 $120 Capital paid in excess of par $410 $410 Retained earnings $500 $600 Total stockholders equity $1120 $1220 Total liabilities and stockholder's equity $1910 $2230 PREPARE A STATEMENT OF CASH FLOW USING THE INDIRECT METHOD, WITH OPERATING, INVESTING AND FINANCING ACTIVITIES

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