You are an internal auditor for Shannon Supplies, Inc., and are reviewing the company's preliminary financial statements. The statements, prepared after making the adjusting entries, but before closing entries for the year ended December 31, 2021, are as follows: SHANNON SUPPLIES, INC. Balance Sheet December 31, 2021 ($ in thousands) Assets Cash Investment in equity securities Accounts receivable, net $2,400 250 810 Inventory 1,060 Equipment 1,240 Less: Accumulated depreciation (560) Total assets $5,200 Liabilities and Shareholders' Equity Accounts payable and accrued expenses $3,320 Income tax payable 220 Common stock, $1 par 200 Additional paid-in capital 750 Retained earnings Total liabilities and shareholders' equity 710 $5,200 SHANNON SUPPLIES, INC. Income Statement For the Year Ended December 31, 2021 ($ in thousands) Sales revenue Operating expenses: Cost of goods sold Selling and administrative Depreciation Income before income tax Income tax expense $3,400 $1,140 896 84 2,120 $1,280 (320)