Balance Sheets As of December 31 Year 2 Year 1 Assets Cash Accounts receivable Inventory Equipment Accumulated depreciation-equipment $ 23,382 $ 2,777 1,912 1,147 6,563 22,535 (10,691) 22,487 Land Total assets Liabilities and stockholders' equity Accounts payable (inventory) Long-term debt Common stock $ 66,188 6,153 43,465 (17,577) 11,937 $ 47,902 $ 2,661 $ 4,299 2,935 6,709 25,200 11,500 35,392 25,394 Total liabilities and stockholders' equity $ 66,188 $ 47,902 Retained earnings Liabilities and stockholders' equity Accounts payable (inventory) $ 2,661 $ 4,299 Long-term debt 2,935 6,709 Common stock 25,200 11,500 Retained earnings 35,392 25,394 Total liabilities and stockholders' equity $ 66,188 $ 47,902 Income Statement For the Year Ended December 31, Year 2 Sales revenue Cost of goods sold Gross margin Depreciation expense Operating income Gain on sale of equipment Loss on disposal of land Net income Additional Data $ 37,860 (15,006) 22,854 (3,407) 19,447 600 (50) $ 19,997 1. During Year 2, the company sold equipment for $18,607; it had originally cost $28,300. Accumulated depreciation on this equipment was $10,293 at the time of the sale. Also, the company purchased equipment for $7,370 cash. 2. The company sold land that had cost $3,150. This land was sold for $3,100, resulting in the recognition of a $50 loss. Also, common stock was issued in exchange for title to land that was valued at $13,700 at the time of exchange. 3. Paid dividends of $9,999.