The following financial statements were prepared on December 31, Year 6. Cash BALANCE SHEET $ Pearl 540,000 440,000 3,200,000 4,200,000 (990,000) 4,800,000 $12,190,000 482,000 Accounts receivable Plant and equipment Inventory Accumulated depreciation Investment in Silver Company (at cost) Liabilities Common shares Retained earnings INCOME STATEMENT Sales $ 5,200,000 Dividend income Cost of sales Miscellaneous expenses Administrative expense Income tax expense Net income 5,250,000 6,458,000 $12,190,000 352,000 5,552,000 2,740,000 440,000 104,000 370,000 (3,654,000) $ 1,898,000 $ 2,200,000 2,200,000 640,000 94,000 34,000 240,000 (1,008,000) $ 1,192,000 RETAINED EARNINGS STATEMENT Balance, January 1 Net income Dividends Balance, December 31 $ 5,300,000 1,898,000 7,198,000 (740,000) $ 6,458,000 $ 1,040,000 1,192,000 2,232,000 (440,000) $ 1,792,000 Silver $ 340,000 660,000 5,090,000 (550,000) $5,540,000 $ 948,000 2,800,000 1,792,000 $5,540,000