Use the following financial statements and additional information.
ONPOINT INCORPORATED
Comparative Balance Sheets
June 30, 2019 and 2018
2019 2018
Assets Cash $ 127,700 $ 74,600
Accounts receivable, net 70,000 55,000
Inventory 65,000 90,000
Prepaid expenses 4,500 5,600
Total current assets 267,200 225,200
Equipment 131,000 121,000
Accumulated depreciation—Equipment (33,000) (11,000)
Total assets $ 365,200 $ 335,200
Liabilities and Equity Accounts payable $ 28,000 $ 34,000
Wages payable 7,000 17,000
Income taxes payable 3,800 4,200
Total current liabilities 38,800 55,200
Notes payable (long term) 35,000 70,000
Total liabilities 73,800 125,200
Equity Common stock, $5 par value 250,000 180,000
Retained earnings 41,400 30,000
Total liabilities and equity $ 365,200 $ 335,200
ONPOINT INCORPORATED
Income Statement
For Year Ended June 30, 2019
Sales $ 699,000
Cost of goods sold 427,000
Gross profit 272,000
Operating expenses Depreciation expense $ 61,000 Other expenses 69,000 Total operating expenses $ 130,000
142,000
Other gains (losses) Gain on sale of equipment 2,200
Income before taxes 144,200
Income taxes expense 44,140
Net income $ 100,060
Additional Information
A $35,000 note payable is retired at its $35,000 carrying (book) value in exchange for cash.
The only changes affecting retained earnings are net income and cash dividends paid.
New equipment is acquired for $60,000 cash.
Received cash for the sale of equipment that had cost $50,000, yielding a $2,200 gain.
Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
All purchases and sales of inventory are on credit.