Comparative financial statement data for Carmono Company follow: Year 2 Year 1 Cash $ 3 $ 6 Accounts receivable 22 24 Inventory 50 40 Plant and equipment 240 200 Less: Accumulated depreciation (65) (50) Total assets $250 $220 Accounts payable $ 40 $ 36 Common shares 150 145 Retained earnings 60 39 Total liabilities and stockholders' equity $250 $250 For year 2, the company reported net income as follows: Sales $275 Cost of goods sold 150 Gross margin 125 Operating expenses Net income 90 $ 35