Derby Company Income Statement For Year Ended December 31, 2012 Sales Cost of goods sold Depreciation expense Other operating expenses Interest expense Other gains (losses): $488,000 $212,540 43,000 106,260 -6.400 (368.200) Gain on sale of equipment Income before taxes Income taxes expense Net income 124,500 41100 $ 83400 dditional Information a. A $20,000 note payable is retired at its carrying value in exchange for cash. b. The only changes affecting retained earnings are net income and cash dividends paid. c. New equipment is acquired for $120,000 cash. d. Received cash for the sale of equipment that had cost $85,000, yielding a gain of $4,700. e. Prepaid expenses relate to Other Expenses on the income statement. f. All purchases and sales of merchandise inventory are on credit