The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and 2015, is as follows: 1 2 Assets Dec. 31, 20Y6 Dec. 31, 20Y5 3 Cash 4 Accounts receivable (net) 5 Inventories 6 Investments 7 | Land $642,720.00 $679,910.00 567,220.00 547,910.00 1,010,310.00 982,080.00 0.00 240,170.00 519,640.00 0.00 8 Equipment 879,880.00 679,710.00 9 Accumulated depreciation (243,670.00) (201,010.00) 10 Total assets $3,376,100.00 $2,928,770.00 11 Liabilities and Stockholders' Equity 12 Accounts payable (merchandise creditors) $772,410.00 $749,340.00 13 Accrued expenses payable (operating expenses) 64,300.00 70,620.00 14 Dividends payable 8,580.00 7,170.00 15 Common stock, $2 par 56,000.00 32,000.00 16 Paid-in capital: Excess of issue price over par-common stock 408,000.00 192,000.00 17 Retained earnings 2,066,810.00 1,877,640.00 18 Total liabilities and stockholders' equity $3,376,100.00 $2,928,770.00 1 Sales 2 Cost of goods sold 3 Gross profit 4 Operating expenses: $5,978,490.00 2,451,600.00 $3,526,890.00 5 Depreciation expense $42,660.00 6 Other operating expenses 3,100,820.00 7 Total operating expenses 3,143,480.00 8 Operating income $383,410.00 9 Other expense: 10 Loss on sale of investments 11 Income before income tax 12 Income tax expense 13 Net income (64,020.00) $319,390.00 103,180.00 $216,210.00 Additional data obtained from an examination of the accounts in the ledger for 2016 are as follows: a. Equipment and land were acquired for cash. b. There were no disposals of equipment during the year. c. The investments were sold for $176,150 cash d. The common stock was issued for cash. e. There was a $27,040 debit to Retained Earnings for cash dividends declared. Instructions 1 Sales 2 Cost of goods sold 3 Gross profit 4 Operating expenses: $5,978,490.00 2,451,600.00 $3,526,890.00 5 Depreciation expense $42,660.00 6 Other operating expenses 3,100,820.00 7 Total operating expenses 3,143,480.00 8 Operating income $383,410.00 9 Other expense: 10 Loss on sale of investments 11 Income before income tax 12 Income tax expense 13 Net income (64,020.00) $319,390.00 103,180.00 $216,210.00 Additional data obtained from an examination of the accounts in the ledger for 20Y6 are as follows: a. Equipment and land were acquired for cash. b. There were no disposals of equipment during the year. c. The investments were sold for $176,150 cash d. The common stock was issued for cash. e. There was a $27,040 debit to Retained Earnings for cash dividends declared.