What cash amount is paid to reduce notes payable in year two

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Reference no: EM134007223

Problem

Comparative balance sheets and income statements follow.

At December 31	Year 2	Year 1
Assets
Cash	$ 91,100	$ 22,900
Accounts receivable, net	39,100	48,600
Inventory	81,800	91,300
Prepaid expenses	5,200	4,100
Total current assets	217,200	166,900
Equipment	105,000	116,200
Accumulated depreciation-Equipment	(16,200)	(8,700)
Total assets	$ 306,000	$ 274,400
Liabilities and Equity
Accounts payable	$ 14,400	$ 20,200
Salaries payable	8,600	4,500
Income taxes payable	1,400	2,500
Total current liabilities	24,400	27,200
Notes payable (long-term)	28,900	66,400
Total liabilities	53,300	93,600
Equity
Common stock, no par value	216,400	172,100
Retained earnings	36,300	8,700
Total liabilities and equity	$ 306,000	$ 274,400

Sales	$ 469,700
Cost of goods sold	302,300
Gross profit	167,400
Operating expenses (excluding depreciation)	85,900
Depreciation expense	36,200
Income before taxes	45,300
Income taxes expense	16,500
Net income	$ 28,800

Task

1. Assume that no additional notes payable are issued in Year 2. What cash amount is paid to reduce notes payable in Year 2? Get the instant assignment help.

2. Assume that all common stock is issued for cash. What cash amount is paid for dividends in Year 2?

Reference no: EM134007223

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