P 14–7

a.

Net income for the year was $56,000; income taxes expense was $20,000.

b.

Depreciation recorded on building and machinery was $14,000.

c.

Amortization of patents amounted to $2,000.

d.

Machinery costing $30,000 was purchased; one-third was paid in cash and a 5-year loan assumed for the balance.

e.

Machinery costing $60,000 was purchased, and was paid for by issuing 6,000 common shares.

f.

Machinery was sold for $16,000 that originally cost $36,000 (one-half depreciated); loss or gain reported in the income statement.

g.

Addition to building was made for $60,000; paid cash.

h.

Land costing $20,000 was sold for $24,000 cash during the year. The related gain was reported in the income statement.

i.

Cash dividends of $20,000 were paid.

j.

No shares were reacquired.