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Presented here are statement of income and retained earnings andComparative Balance Sheets for Madison Garden PTY LTD, whichoperates a National chain of sporting goods.

Statement of income and Retained Earnings for the year ended 31December 2016

Net sales R48000

Cost of goods sold R36000

Gross profit R12000

Selling , General and admin expense R6000

Operating income R6000

Interest expense 280

Income before tax 5720

Income tax expense 2280

Net income 3440

Preference Dividends 100

Income available to ordinary shareholders 3340

Ordinary dividends 500

To Retained Earnings 2840

Retained Earnings 01/01/2016 12000

Retained Earnings by the end of the year 14840

COMPARATIVE BALANCE SHEETS AS AT

DECEMBER 31 2016 2015

Cash 840 2700

Accounts Receivable 12500 9000

Inventory 8000 5500

Prepaid Insurance 100 400

Total Current Assets 21440 17600

Land 4000 4000

Buildings & Equipment 12000 9000

Accumulated Depreciation (3700) (3000)

Total Long Term Assets R12300 R10000

Total Assets R33740 R27600

Accounts payable 7300 5000

Taxes Payable 4600 4200

Notes payable 2400 1600

Current portion of Mortgage bond 200 200

Total Current Liabilities 14500 11000

Mortgage Bond 1400 1600

Total Liabilities 15900 12600

Preference Shares 1000 1000

Ordinary Shares 2000 2000

Retained Earnings 14840 12000

Total 17840 15000

R33 740 R27600