The net changes in the balance sheet accounts of Eusey, Inc. for the year 2011 are shown below: Account Debit Credit Cash $ 125,600 Accounts receivable $ 64,000 Allowance for doubtful accounts 14,000 Inventory 217,200 Prepaid expenses 20,000 Long-term investments 144,000 Land 300,000 Buildings 600,000 Machinery 100,000 Office equipment 28,000 Accumulated depreciation: Buildings 24,000 Machinery 20,000 Office equipment 12,000 Accounts payable 183,200 Accrued liabilities 72,000 Dividends payable 128,000 Premium on bonds 32,000 Bonds payable 800,000 Preferred stock ($50 par) 60,000 Common stock ($10 par) 156,000 Additional paid-in capital—common 223,200 Retained earnings 87,200 $1,705,200 $1,705,200 Additional information: 1. Income Statement Data for Year Ended December 31, 2011 Income before extraordinary item $272,000 Extraordinary loss: Condemnation of land 132,000 Net income $140,000 2. Cash dividends of $128,000 were declared December 15, 2011, payable January 15, 2012. A 5% stock dividend was issued March 31, 2011, when the market value was $22.00 per share. 3. The long-term investments were sold for $140,000. 4. A building and land which cost $480,000 and had a book value of $300,000 were sold for $400,000. The cost of the land, included in the cost and book value above, was $20,000. 5. The following entry was made to record an exchange of an old machine for a new one: Machinery 160,000 Accumulated Depreciation—Machinery 40,000 Machinery 60,000 Cash 140,000 6. A fully depreciated copier machine which cost $28,000 was written off. 7. Preferred stock of $60,000 par value was redeemed for $80,000. Problem 1 Continued 8. The company sold 12,000 shares of its common stock ($10 par) on June 15, 2011 for $25 a share. There were 87,600 shares outstanding on December 31, 2011. 9. Bonds were sold at 104 on December 31, 2011. 10. Land that was condemned had a book value of $240,000.