Question : Georgia company, a merchandiser, recently completed its calendar-year 2009 operations.
Georgia company, a merchandiser, recently completed its calendar-year 2009 operations. For the year, (1) all sales are credit sales, (2) all credits to accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's balance sheet and income statement follow. The loss on the cash sale of equipment was $5.875 (details in b). Sold equipment costing $46,500, with accumulated depreciation of $29,000. Purchased equipment costing $97,500 by paying $35,000 cash and signing a long-term note payable for the balance. Borrowed $3,000 cash by signing a shot-term note payable. Paid $40,500 cash to reduce the long-term notes payable. issued 2,350 shares of common stock for $20 cash per share. Declared and paid cash dividends of $51,900.