The following balances were taken from the books of Waterway Corp. on December 31, 2020. Interest revenue $87,900 Accumulated depreciation—equipment $41,900 Cash 52,900 Accumulated depreciation—buildings 29,900 Sales revenue 1,381,900 Notes receivable 156,900 Accounts receivable 151,900 Selling expenses 195,900 Prepaid insurance 21,900 Accounts payable 171,900 Sales returns and allowances 151,900 Bonds payable 101,900 Allowance for doubtful accounts 8,900 Administrative and general expenses 98,900 Sales discounts 46,900 Accrued liabilities 33,900 Land 101,900 Interest expense 61,900 Equipment 201,900 Notes payable 101,900 Buildings 141,900 Loss from earthquake damage 151,900 Cost of goods sold 622,900 Common stock 501,900 Retained earnings 22,900 Assume the total effective tax rate on all items is 20%. Prepare a multiple-step income statement; 100,000 shares of common stock were outstanding during the year.

The gilbert instrument corporation is considering replacing the wood steamer it currently uses to shape guitar sides. the steamer has 6 years of remaining life. if kept,the steamer will have depreciaiton expenses of $650 for five years and $325 for the sixthyear. its current book value is $3,575, and it can be sold on an internet auction site for$4,150 at this time. if the old steamer is not replaced, it can be sold for $800 at the endof its useful life. gilbert is considering purchasing the side steamer 3000, a higher-end steamer, whichcosts $12,000 and has an estimated useful life of 6 years with an estimated salvage value of$1,500. this steamer falls into the macrs 5-year class, so the applicable depreciationrates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. the new steamer is fasterand allows for an output expansion, so sales would rise by $2,000 per year; the newmachine's much greater efficiency would reduce operating expenses by $1,900 per year.to support the greater sales, the new machine would require that inventories increase by$2,900, but accounts payable would simultaneously increase by $700. gilbert's marginalfederal-plus-state tax rate is 40%, and its wacc is 15%.a. should it replace the old steamer? b. npv of replace = $2,083.51