Additional data $($ignoring taxes$)$:

Net income for the year was $$42,400.$

$,$ Cash dividends declared and paid during the year were $$21,300.$

A $20\%$ stock dividend was declared during the year. $$25,000$ of retained earnings was capitalized.

Equity investments $($level of ownership is less than $20\%)$ that cost $$24,800$ were sold during the year for $$28,500.$ No

unrealized gains and losses were recorded on these investments in $2025.$

Machinery that cost $$3,800,$ on which $$750$ of depreciation had accumulated, was sold for $$2,250.$ Sheridan's $2025$ income statement follows $($ignoring taxes$).$ For the Year Ended December $31,2025$

$($Indirect Method$)$

Adjustments to reconcile net income to$]$

$]$

$$

$-$

$]$

I

$,$

$]$

$

Comparative balance sheet accounts of Sheridan Inc. are presented below.

Sheridan Inc.

Comparative Balance Sheet Accounts

As of December $31,2025$ and $2024$