Soft Touch Company was started several years ago by two golf Instructors. The company's comparative balance sheets and Income statement are presented below, along with additional Information. Current Year Previous Year Balance sheet at December 31 Cash Accounts Receivable Equipment Accumulated Depreciation-Equipment Total Assets Accounts Payable Salaries and Wages Payable Note Payable (long-term) Common stock Retained Earnings Total Liabilities and stockholders' Equity Income Statement Service Revenue Salaries and wages Expense Depreciation Expense Loss on Disposal of Equipment Income Tax Expense Net Income $14,34 3,180 11,600 (3,420) $25,620 $ 1,600 1,240 3,600 10,000 9,180 $25,620 $ 9,500 4,180 10,000 (3,180) $20,500 $ 2,600 1,800 1,080 10, eee 5,100 $20,500 $77,480 71, eee 888 440 1,800 $ 4,080 Additional Date: a. Bought new golf clubs for $3,600 cash and sold existing clubs for $1,000 cash. The clubs that were sold had cost $2,000 and had Accumulated Depreciation of $560 at the time of sale. b. Borrowed $2,600 cash from the bank during the year. c. Accounts Payable Includes only purchases of services made on credit for operating purposes. Because there are no liability accounts relating to Income tax, assume that Income Tax Expense was fully paid in cash