following changes took last year in Pavolik Company's balance sheet accounts The place Asset and Contra-Asset Accounts Liabilities and Equity Accounts 67 l 21 I Cash Accounts payable 13 10 D Accounts receivable Accrued liabilities 28 D ncome taxes payable 10 l Inventory 7 17 I Prepaid expenses Bonds payable 29 D Common stock 44 D Long-term investments Property, plant, and equipment 146 I Retained earnings 74 l 41 Accumulated depreciation D Decrease ncrease Long-term investments that had cost the company $29 were sold during the year for $46, and land that had cost $29 was sold for $75. In addition, the company declared and paid $35 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: 601 Sales Cost of goods sold 249 Gross margin 352 276 Selling and administrative expenses Net operating income 76 Nonoperating items: 465 Gain on sale of land Gain on sale of investment 17 63 Income before taxes 139 Income taxes 30 109 Net income