The comparative balance sheets and income statements for Franklin Company follow: Assets Cash Accounts receivable Balance Sheets As of December 31 Year 2 Year 1 $ 24,726 $ 2,741 1,580 948 Inventory Equipment Accumulated depreciation-equipment Land Total assets Liabilities and equity Accounts payable (inventory) Long-term debt Common stock Retained earnings Total liabilities and equity 6,422 21,832 (11,354) 18,595 $ 61,801 $ 2,505 2,682 25,500 6,021 43,372 (17,614) 8,985 $ 44,453 4,047 6,130 11,000 31,114 $ 61,801 Income Statement For the Year Ended December 31, Year 2 Sales revenue Cost of goods sold Gross margin Depreciation expense Operating income Gain on sale of equipment Loss on disposal of land Net income $ 31,500 (12,485) 19,015 (3,848) 15,167 600 (90) $ 15,677 23,276 $ 44,453