The Diversified Portfolio Corporation provides investment advice to customers. A condensed income statement for the year ended December 31, 2021, appears below: Service revenue Operating expenses $1,200,000 850,000 Income before income taxes Income tax expense 350,000 87,500 Net income $ 262,500 The following balance sheet information also is available: 12/31/2021 12/31/2020 Cash $462,500 $ 85,000 Accounts receivable 150,000 Accrued liabilities (for operating expenses) 100,000 Income taxes payable 25,000 115,000 75,000 45,000 In addition, the following transactions took place during the year: 1. Common stock was issued for $130,000 in cash. 2. Long-term investments were sold for $65,000 in cash. The original cost of the investments also was $65,000. 3. $95,000 in cash dividends was paid to shareholders. 4. The company has no outstanding debt, other than those payables listed above. 5. Operating expenses include $45,000 in depreciation expense.