Portions of the financial statements for Hawkeye Company are provided below. Income Statement For the Year Ended December 31, 2016 880 Sales Cost of goods sold 340 Gross margin 540 Operating expenses: $230 Salaries Depreciation 188 Inventory loss from water damage 12 Total operating expenses 430 Operating income 110 Other income (expense): Gain on sale of cash equivalents Interest expense (38) Income before tax 76 Income tax expense 38 38 Net income HAWKEYE COMPANY Selected Accounts from comparative Balance Sheets December 31, 2016 and 2015 Year 2016 2015 Change Cash $236 $212 $24 Accounts receivable 393 417 (24) Inventory 884 862 22 Accounts payable 222 258 (36) Salaries payable 182 192 (10) Interest payable 59 52 Income taxes payable 92 108 (16)