See the attachment.
Condensed Balance Sheet
December 31, 20X1 and 20X2
Cash $10,000 $5,000
Accounts receivable 126500 118500
Investments(long-term) 10000 25000
Equipment 800000 925000
Accumulated depreciation -20000 -64000
Total assets $926,500 $1,009,500
Accounts payable $18,000 $21,000
Note payable(current) 25000 42000
Dividend payable 5000 6000
Note payable 675000 690000
Noncurrent liabilities 100000 105000
Paid-in capital in excess of par 70000 95000
Treasury stock -20000 -30000
Retained earnings $53,500 $80,500
Total liabilities and owners' equity $926,500 $1,009,500
a. Assume equipment costing $25000 and depreciated down to $10000 was sold for $12000 during 20X2.
b. Assume all current liabilities at the end of the year are paid during the following year.
c. Assume retained earning is impacted only by depreciation of dividends during the year and net earnings for the year.
1. What is the amount of cash at the beginning of 20X1?
2. What are the current assets at the biginning of 20X2?
3. What is the amount of net working capital at the end of 20X1?
4. How has the change in accounts payable during 20X2 affected cash at the end of 20X2?
5. What is thenet book value of the Texan's equipment at the end of 20X2?
6. Based on the above, what were the net earnings for the Texan for 20X2?
7. If the changes in the common stock and paid-in capital in excess of par from 20X1 to 20X2 are from the sale of additional shares, what was the selling price per share? (Assume 10000 shares were sold)
8. How much long-term debt was borrowed during 20X2?
9. What was the total gain and loss on equipment sales?
10. What were purchases of equipment during 20X2?
11. What was the depreciation expense for 20X2?
Given the Condensed Balance Sheet, the solution discloses the answers and the calculations and explanations for the answers. Question 1 is not as easy as it seems, but a discussion is included about how the opening balance might be derived.