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Financial statements for Peachfield Corporation as well as additional information relevant to cash flows during the period follow.

Peachfield Corporation

Income Statement

For Year Ended December $31,20-2$

$1$

Net sales

$$985,000\mathrm{.}00$

$2$

Cost of goods sold

$515,000\mathrm{.}00$

$3$

Gross profit

$$470,000\mathrm{.}00$

$4$

Operating expenses

$299,400\mathrm{.}00$

$5$

Operating income

$$170,600\mathrm{.}00$

$6$

Other revenues and expenses:

$7$

Gain on sale of office equipment

$$5,000\mathrm{.}00$

$8$

Interest revenue

$2,100\mathrm{.}00$

$9$

Interest expense

$(436\mathrm{.}00)$

$6,664\mathrm{.}00$

$10$

Income before taxes

$$177,264\mathrm{.}00$

$11$

Income tax expense

$60,500\mathrm{.}00$

$12$

Net income

$$116,764\mathrm{.}00$

Peachfield Corporation

Statement of Retained Earnings

For Year Ended December $31,20-2$

$1$

Retained earnings, January $1,20-2$

$$141,973\mathrm{.}00$

$2$

Net income

$$116,764\mathrm{.}00$

$3$

Less dividends

$20,000\mathrm{.}00$

$4$

Net increase in retained earnings

$96,764\mathrm{.}00$

$5$

Retained earnings, December $31,20-2$

$$238,737\mathrm{.}00$

Peachfield Corporation

Comparative Balance Sheet

December $31,20-2$ and $20-1$

$1$

$2002$

$2001$

INCREASE $($DECREASE$)$

$2$

Assets

$3$

Current assets:

$4$

Cash

$$102,072\mathrm{.}00$

$$27,200\mathrm{.}00$

$$74,872\mathrm{.}00$

$5$

Government notes

$3,600\mathrm{.}00$

$12,000\mathrm{.}00$

$(8,400\mathrm{.}00)$

$6$

Accrued interest receivable

$320\mathrm{.}00$

$250\mathrm{.}00$

$70\mathrm{.}00$

$7$

Accounts receivable $($net$)$

$152,945\mathrm{.}00$

$140,905\mathrm{.}00$

$12,040\mathrm{.}00$

$8$

Merchandise inventory

$355,490\mathrm{.}00$

$295,400\mathrm{.}00$

$60,090\mathrm{.}00$

$9$

Supplies and prepayments

$14,500\mathrm{.}00$

$21,500\mathrm{.}00$

$(7,000\mathrm{.}00)$

$10$

Total current assets

$$628,927\mathrm{.}00$

$$497,255\mathrm{.}00$

$131,672\mathrm{.}00$

$11$

Property, plant, and equipment:

$12$

Store equipment

$$308,000\mathrm{.}00$

$$232,800\mathrm{.}00$

$75,200\mathrm{.}00$

$13$

Less accumulated depreciation$-$store equipment

$108,000\mathrm{.}00$

$200,000\mathrm{.}00$

$84,000\mathrm{.}00$

$148,800\mathrm{.}00$

$24,000\mathrm{.}00$

$14$

Delivery equipment

$$270,000\mathrm{.}00$

$$192,000\mathrm{.}00$

$78,000\mathrm{.}00$

$15$

Less accumulated depreciation$-$delivery equipment

$75,000\mathrm{.}00$

$195,000\mathrm{.}00$

$48,000\mathrm{.}00$

$144,000\mathrm{.}00$

$27,000\mathrm{.}00$

$16$

Office equipment

$$148,000\mathrm{.}00$

$$203,940\mathrm{.}00$

$(55,940\mathrm{.}00)$

$17$

Less accumulated depreciation$-$office equipment

$38,000\mathrm{.}00$

$110,000\mathrm{.}00$

$36,600\mathrm{.}00$

$167,340\mathrm{.}00$

$1,400\mathrm{.}00$

$18$

Total property, plant, and equipment

$505,000\mathrm{.}00$

$460,140\mathrm{.}00$

$44,860\mathrm{.}00$

$19$

Total assets

$$1,133,927\mathrm{.}00$

$$957,395\mathrm{.}00$

$176,532\mathrm{.}00$

$20$

Liabilities

$21$

Current liabilities:

$22$

Notes payable

$$65,480\mathrm{.}00$

$$54,780\mathrm{.}00$

$10,700\mathrm{.}00$

$23$

Accounts payable

$53,500\mathrm{.}00$

$125,473\mathrm{.}00$

$(71,973\mathrm{.}00)$

$24$

Income tax payable

$7,000\mathrm{.}00$

$5,000\mathrm{.}00$

$2,000\mathrm{.}00$

$25$

Accrued and withheld payroll taxes

$8,760\mathrm{.}00$

$7,644\mathrm{.}00$

$1,116\mathrm{.}00$

$26$

Accrued interest payable

$450\mathrm{.}00$

$525\mathrm{.}00$

$(75\mathrm{.}00)$

$27$

Total current liabilities

$$135,190\mathrm{.}00$

$$193,422\mathrm{.}00$

$(58,232\mathrm{.}00)$

$28$

Long$-$term liabilities:

$29$

Notes payable

$20,000\mathrm{.}00$

$20,000\mathrm{.}00$

$30$

Total liabilities

$$155,190\mathrm{.}00$

$$193,422\mathrm{.}00$

$(38,232\mathrm{.}00)$

$31$

Stockholders Equity

$32$

Common stock $($$$10$ par, $1,000,000$ shares authorized;

$33$

Issued: $50,000$ in $20-2$ and $38,800$ in $20-1)$

$$500,000\mathrm{.}00$

$$388,000\mathrm{.}00$

$112,000\mathrm{.}00$

$34$

Paid$-$in capital in excess of par$-$common stock

$240,000\mathrm{.}00$

$234,000\mathrm{.}00$

$6,000\mathrm{.}00$

$35$

Retained earnings

$238,737\mathrm{.}00$

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