The following information was taken from Lamberson Company's accounting records: Account Balances Account Titles January 1, 2016 December 31, 2016 Debits Cash $1,400 $2,400 Accounts Receivable (net) 2,800 2,690 Marketable Securities (at cost) 1,700 3,000 Allowance for Change in Value 500 800 Inventories 8,100 7,910 Prepaid Items 1,300 1,710 Investments (long-term) 7,000 5,400 Land 15,000 15,000 Buildings and Equipment 32,000 46,200 Discount on Bonds Payable 290 $69,800 $85,400 Credits Accumulated Depreciation $16,000 $16,400 Accounts Payable 3,800 4,150 Income Taxes Payable 2,400 2,504 Wages Payable 1,100 650 Interest Payable 400 Note Payable (long-term) 3,500 12% Bonds Payable 10,000 Deferred Taxes Payable 800 1,196 Convertible Preferred Stock, $100 par 9,000 Common Stock, $10 par 14,000 21,500 Additional Paid-in Capital 8,700 13,700 Unrealized Increase in Value of Marketable Securities 500 800 Retained Earnings 10,000 14,100 $69,800 $85,400 Additional information for the year: Sales $ 39,930 Cost of goods sold (19,890) Depreciation expense (2,100) Wages expense (11,000) Other operating expenses (1,000) Bond interest expense (410) Dividend revenue 820 Gain on sale of investments 700 Loss on sale of equipment (200) Income tax expense (2,050) Net income $ 4,800 Dividends declared and paid totaled $700. On January 1, 2016, convertible preferred stock that had originally been issued at par value were converted into 500 shares of common stock. The book value method was used to account for the conversion. Long-term nonmarketable investments that cost $1,600 were sold for $2,300. The long-term note payable was paid by issuing 250 shares of common stock at the beginning of the year. Equipment with a cost of $2,000 and a book value of $300 was sold for $100. The company uses one Accumulated Depreciation account for all depreciable assets. Equipment was purchased at a cost of $16,200. The 12% bonds payable were issued on August 31, 2016, at 97. They mature on August 31, 2026. The company uses the straight-line method to amortize the discount. Taxable income was less than pretax accounting income, resulting in a $396 increase in deferred taxes payable. Short-term marketable securities were purchased at a cost of $1,300. The portfolio was increased by $300 to a $3,800 fair value at year-end by adjusting the related allowance account.