Selected financial information for Frank Corporation is presented below. Selected transactions for the current year are as follows: a. Purchased investment securities for $5,700 cash. b. Borrowed $16,400 on a two-year, 8 percent interest-bearing note. c. During the year, sold machinery for its carrying amount; received $12,050 in cash. d. Purchased machinery for $51,400; paid $9,700 in cash and signed a four-year note payable to the dealer for $41,700. e. Declared and paid a cash dividend of $10,700 on December 31 of the current year. Selected account balances at December 31 of the current and prior years are as follows: December 31 Current Prior Year Cash Accounts receivable Inventory Accounts payable Accrued wages payable Income tax payable Year $80,900 $21,700 17,700 12,350 52,700 61,400 7,700 11,400 1,150 1,700 5,700 3,350 One-fourth of the sales and one-third of the purchases were made on credit. FRANK CORPORATION Statement of Earnings For the Current Year Ended December 31 Sales revenue $414,000 Cost of sales 275,000 Gross profit 139,000 Expenses Salaries and wages $51,700 Depreciation 9,900 Rent (no accruals) 6,500 Interest (no accruals) 12,900 Income tax 12,500 Total expenses 93,500 Net earnings $ 45,500