The following information is available for the Ehrens Corporation: Ehrens Corporation Balance Sheets At December 31 2005 2004 Assets: Cash 24,640 $23,040 Accounts Receivable 32,180 29,400 Merchandise Inventory 73,125 61,710 Long Term Investments 55,900 56,400 Equipment 175,500 145,500 Depreciation (33,550) (31,200) Total Assets $327,795 $284,850 Liabilities: Accounts Payable $65,000 $40,380 Income Taxes Payable 10,725 10,200 Bonds Payable 48,750 66,000 Total Liabilities $124,475 $116,580 Stockholders Equity: Common Stock $117,000 $96,000 Capital in excess of par 13,000 9,000 Retained Earnings 73,320 63,270 Total equity $203,320 $168,270 Total Liabilitie/equity $327,795 $284,850 Ehrens Corporation Income Statement For Year Ended December 31, 2005 Sales $240,000 Cost of Goods Sold $80,900 Depreciation Expense 29,400 Operating Expenses 48,000 Interest Expense 2,000 $160,300 Other gains (losses): Loss on sale of equipment $ (8,400) Income Before Taxes $ 71,300 Income Taxes Expense 27,650 Net Income $ 43,650 Additional information: (1) There was no gain or loss on the sales of the long-term investments, nor on the bonds retired. (2) Old equipment with an original cost of $37,550 was sold for $2,100 cash. (3) New equipment was purchased for $67,550 cash. (4) Cash dividends of$33,600 were paid. (5) Additional shares of stock were issued for cash.