Pharoah Inc., a greeting card company, had the following statements prepared as of December 31, 2017.PHAROAH INC.COMPARATIVE BALANCE SHEETAS OF DECEMBER 31, 2017 AND 201612/31/201712/31/2016Cash$6,000 $7,000 Accounts receivable62,60050,600Short-term debt investments (available-for-sale)35,20018,100Inventory39,60059,700Prepaid rent5,0004,000Equipment152,800128,900Accumulated depreciationequipment(34,900(24,800Copyrights45,90049,800Total assets$312,200 $293,300 Accounts payable$45,900 $39,900 Income taxes payable4,0006,000Salaries and wages payable8,1003,900Short-term loans payable8,00010,000Long-term loans payable60,50068,500Common stock, $10 par100,000100,000Contributed capital, common stock30,00030,000Retained earnings55,70035,000Total liabilities & stockholders equity$312,200 $293,300 PHAROAH INC.INCOME STATEMENTFOR THE YEAR ENDING DECEMBER 31, 2017Sales revenue$337,675 Cost of goods sold175,500Gross profit162,175Operating expenses119,500Operating income42,675Interest expense$11,300 Gain on sale of equipment2,0009,300

3Income before tax33,375Income tax expense6,675Net income$26,700 Additional information:1. Dividends in the amount of $6,000 were declared and paid during 2017.2. Depreciation expense and amortization expense are included in operating expenses.3. No unrealized gains or losses have occurred on the investments during the year.4. Equipment that had a cost of $20,000 and was 70% depreciated was sold during 2017.

Explain operations.