Question 1 - Given the following information, prepare an income statement for year ended December 31.
($000)
Stockholder's equity 500
Accounts payable 150
Cost of goods sold 55
Accumulated depreciation 500
General & administrative expenses 12
Taxes 40%
Preferred stock dividends 5
Interest expense 5
Sales revenue 100
Depreciation expense 10
Question 2 - Ajax Inc. had profits of $200,000 for the year. Their retained earnings account grew from $800,000 at the beginning of the year to $950,000 by year end. How much did the firm pay out in dividends?