Asset and Contra-Asset Accounts Cash $ 5 D The following changes took place last year in Pavolik Company's balance sheet accounts: Liabilities and Stockholders' Equity Accounts Accounts payable Accounts receivable $110 I Accrued liabilities Inventory $ 70 D Income taxes payable Prepaid expenses $ 9 1 Bonds payable Long-term investments $ 6 D Common stock Property, plant, and equipment $185 I Retained earnings $ 35 I $ 4 D $ 8 1 $150 I $ 80 D $ 54 I $ 60 I Accumulated depreciation D = Decrease; I = Increase. Long-term investments that cost the company $6 were sold during the year for $16 and land that cost $15 was sold for $9. In addition, the company declared and paid $30 in cash dividends during the year. Besides the sale of land, no other sales or retirements of plant and equipment took place during the year. Pavolik did not retire any bonds during the year or issue any new common stock. The company's income statement for the year follows: Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: Loss on sale of land Gain on sale of investments Income before taxes Income taxes Net income $700 400 300 184 116 $ (6) 10 4 120 36 $ 84