Presented below are the financial statements of Cullumber Company. Cullumber Company Comparative Balance Sheets December 31 Assets 2022 2021 Cash $ 87,500 $ 50,000 Accounts receivable 50,000 35,000 Inventory 70,000 50,000 Property, plant, and equipment 150,000 195,000 Accumulated depreciation (80,000 ) (60,000 ) Total $277,500 $270,000 Liabilities and Stockholders Equity Accounts payable $ 47,500 $ 37,500 Income taxes payable 17,500 20,000 Bonds payable 42,500 82,500 Common stock 45,000 35,000 Retained earnings 125,000 95,000 Total $277,500 $270,000 Cullumber Company Income Statement For the Year Ended December 31, 2022 Sales revenue $605,000 Cost of goods sold 437,500 Gross profit 167,500 Selling expenses $45,000 Administrative expenses 15,000 60,000 Income from operations 107,500 Interest expense 7,500 Income before income taxes 100,000 Income tax expense 20,000 Net income $ 80,000 Additional data: 1. Depreciation expense was $43,750. 2. Dividends declared and paid were $50,000. 3. During the year equipment was sold for $21,250 cash. This equipment cost $45,000 originally and had accumulated depreciation of $23,750 at the time of sale. Further analysis reveals the following. 1. Accounts payable pertain to merchandise suppliers. 2. All operating expenses except for depreciation were paid in cash. 3. All depreciation expense is in the selling expense category. 4. All sales and purchases are on account.