Problem 12-8A Presented below are the financial statements of Teal Mountain Company Teal Mountain Company Comparative Balance Sheets Assets Cash Accounts receivable Inventory Property, plant, and equipment Accumulated depreciation Tota 2017 2016 $38,850 22,200 31,080 66,600 $ 22,200 15,540 22,200 86,580 (35,520) 26,640) $123,210 $119,880 Liabilities and Stockholders' Equity Accounts payable Income taxes payable Bonds payable Common stock Retained earnings Tota $ 21,090 7,770 18,870 19,980 55,500 $123,210 $16,650 8,880 36,630 15,540 42,180 $119,880 Teal Mountain Company For the Year Ended December 31, 2017 Sales revenue Cost of goods sold Gross profit Selling expenses Administrative expenses Income from operations Interest expense Income before income taxes Income tax expense Net income $268,620 194,250 74,370 $19,980 6,660 26,640 47,730 3,330 44,400 8,880 $35,520 Additional data: 1. Depreciation expense was $19,425 2. Dividends declared and paid were $22,200 3. During the year equipment was sold for $9,435 cash. This equipment cost $19,980 originally and had accurnulated depreciation of $10,545 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