The management team of Wickersham Brothers Inc. is preparing its annual financial statements. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statements are summarized. Balance Sheet Assets Cash Accounts receivable Merchandise inventory Property and equipment Less: Accumulated depreciation Total assets. Liabilities: Accounts payable Salaries and Wages Payable Notes payable, long-term Stockholders' Equity: Common stock Retained earnings Total liabilities and stockholders' equity Income Statement ces Sales Cost of goods sold Depreciation expense Other expenses Net income Current Year Prior Year $ 70,500 100,000 $ 91,500 87,500 75,000 140,000 81,250 75,000 (39,600) $345,900 (20,000) $315,250 $ 12,500 2,500 62,500 $ 15,000 1,250 75,000 120,000. 100,000 148,400 124,000 $345,900 $315,250 $300,000. 160,000 19,600 75,000 $ 45,400 Other information from the company's records includes the following: Bought equipment for cash, $65,000. Paid $12,500 on long-term note payable. Issued new shares of common stock for $20,000 cash. Cash dividends of $21,000 were declared and paid to stockholders. Accounts Payable arose from inventory purchases on credit. Income tax expense ($11,350) and interest expense ($3,750) were paid in full at the end of both years and are included in Other Expenses.