xPresented below are the $2024$ income statement and comparative balance sheets for Santana Industries.

SANTANA INDUSTRIES

Income Statement

For the Year Ended December $31,2024$

$($$ in thousands$)$

Sales revenue $ $17,650$

Service revenue $6,800$

Total revenue $ $24,450$

Operating expenses:

Cost of goods sold $8,900$

Selling expense $4,100$

General and administrative expense $3,200$

Total operating expenses $16,200$

Operating income $8,250$

Interest expense $320$

Income before income taxes $7,930$

Income tax expense $3,300$

Net income $ $4,630$

Balance Sheet Information $($$ in thousands$)$ December $31,2024$ December $31,2023$

Assets:

Cash $ $10,000$ $ $3,730$

Accounts receivable $5,9003,900$

Inventory $7,4004,700$

Prepaid rent $320640$

Equipment $17,90015,400$

Less: Accumulated depreciation $(6,800)(6,200)$

Total assets $ $34,720$ $ $22,170$

Liabilities and Shareholders$$ Equity:

Accounts payable $ $4,800$ $ $2,800$

Interest payable $2700$

Deferred revenue $1,140770$

Income taxes payable $7201,140$

Notes payable $($due $12/31/2026)8,4000$

Common stock $11,70011,700$

Retained earnings $7,6905,760$

Total liabilities and shareholders' equity $ $34,720$ $ $22,170$

Additional information for the $2024$ fiscal year $($$ in thousands$)$:

Cash dividends of $$2,700$ were declared and paid.

Equipment costing $$7,400$ was purchased with cash.

Equipment with a book value of $$2,200($cost of $$4,900$ less accumulated depreciation of $$2,700)$ was sold for $$2,200.$

Depreciation of $$3,300$ is included in operating expenses.

Required: