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Jacoby Corporation, a merchandiser, recently completed its calendar year 2013 operations. For the year: All sales are credit sales All credits to Accounts Receivable reflect cash receipts from customers All purchases of inventory are on credit All debits to Accounts Payable reflect cash payments for inventory Other expenses are paid in advance and are initially debited to Prepaid Expenses. The companys balance sheets and income statement follow.

Jacoby Corporation Balance Sheet December 31, 2012 and 2013

	2013	2012
Assets
Cash	$136,500	$71,550
Accounts Receivable	$74,100	90,750
Merchandise inventory	454,500	490,200
Prepaid expenses	17,100	19,200
Equipment	278,250	216,000
Accumulated depreciation	(108,750)	(93,000)
Total Assets	$851,700	$794,700
Liabilities
Accounts payable	$117,450	$123,450
Short term notes payable	17,250	11,250
long term notes payable	112,500	82,500
common stock $ 5 par	465,000	450,000
Paid in capital in excess	18,000	0
Retained earnings	121,500	127,500
TOTAL Liabilities	$851,700	$794,700

Jacoby Corporation Income Statement December 31, 2013

Sales		$1,083,000
Cost of goods sold		585,000
Gross profit		498,000
Operating Expenses
Depreciation expense	$36,600
Other expenses	392,850
Total Operating Expenses		429,450
		68,550
Gain and losses
loss on sale of equipment		2,100
Income before Taxes		66,450
Income Tax expense		9,450
Net income		$57,000

Additional Information on Year 2011 Transactions

a. The loss on the cash sale of equipment was $2,100 (details in b).

b. Sold equipment costing $51,000, with accumulated depreciation of $20,850, for $28,050 cash.

c. Purchased equipment costing $113,250 by paying $38,250 cash and signing a long-term note payable for the balance

d. .

e. Borrowed $6,000 cash by signing a short-term note payable.

f. Paid $45,000 cash to reduce the long-term notes payable.

g. Issued 3,000 shares of common stock for $11 cash per share.

h. Declared and paid cash dividends of $63,000.

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