Assets 2018 2019 Cash $17,000 $12,400 Short-term investments. 48,600 18,000 Accounts receivable 351,200 632,160 Inventories 710,200 1,287,360 Total current assets $1,127,000 $1,949,920 Gross fixed assets 491,000 1,202,950 Less: accumulated depreciation 146,200 263,160 Net fixed assets $344,800 $939,790 Total assets $1,471,800 $2,889,710 Liabilities and equity 2018 2019 Accounts payable $148,600 $327,118 Notes payable 200,000 720,000 Accruals 136,000 284,960 Total current liabilities $484,600 $1,332,078 Long-term debt 323,432 1,000,000 Common stock (100,000 shares) 460,000 460,000 Retained earnings 203,768 97,632 Total equity $663,768 $557,632 Total liabilities and equity $1,471,800 $2,889,710 2018 2019 Sales $7,222,384 $7,460,011 Cost of goods sold 3,123,321 3,800,000 Other expenses 340,000 720,000 Depreciation 18,900 116,960 Total operating costs $3,482,221 $4,636,960 EBIT $3,740,163 $2,823,051 Interest expense 62,500 176,000 Pretax earnings $3,677,663 $2,647,051 Taxes (40%) 1,471,065 1,058,820 Net income $2,206,598 $1,588,231 4. Construct a common size balance sheets for 2018 and 2019. Comment on any changes in the percentages of assets and liabilities.

On december 31, 2011, daggett company issued $750,000 of ten-year, 9% bonds payable for $700,353, yielding an effective interest rate of 10%. interest is payable semiannually on june 30 and december 31. prepare journal entries to reflect (a) the issuance of the bonds, (b) the semiannual interest payment and discount amortization (effective interest method) on june 30, 2012, and (c) the semiannual interest payment and discount amortization on december 31, 2012. round amounts to the nearest dollar.

Exercise 18-15 sheffield appliance center is an experienced home appliance dealer. sheffield appliance center also offers a number of services for the home appliances that it sells. assume that sheffield appliance center sells ovens on a standalone basis. sheffield appliance center also sells installation services and maintenance services for ovens. however, sheffield appliance center does not offer installation or maintenance services to customers who buy ovens from other vendors. pricing for ovens is as follows. oven only $790 oven with installation service 850 oven with maintenance services 970 oven with installation and maintenance services 990 in each instance in which maintenance services are provided, the maintenance service is separately priced within the arrangement at $180. additionally, the incremental amount charged by sheffield appliance center for installation approximates the amount charged by independent third parties. ovens are sold subject to a general right of return. if a customer purchases an oven with installation and/or maintenance services, in the event sheffield appliance center does not complete the service satisfactorily, the customer is only entitled to a refund of the portion of the fee that exceeds $790. assume that a customer purchases an oven with both installation and maintenance services for $990. (b) indicate the amount of revenue that should be allocated to the oven, the installation, and to the maintenance contract.

Sailcloth & more currently produces boat sails and is considering expanding its operations to include awnings for homes and travel trailers. the company owns land beside its current manufacturing facility that could be used for the expansion. the company bought this land 5 years ago at a cost of $319,000. at the time of purchase, the company paid $24,000 to level out the land so it would be suitable for future use. today, the land is valued at $295,000. the company has some unused equipment that it currently owns valued at $38,000. this equipment could be used for producing awnings if $12,000 is spent for equipment modifications. other equipment costing $490,000 will also be required. what is the amount of the initial cash flow for this expansion project?