Question

A comparative balance sheet and income statement for Groton Company follow:

Groton Company Comparative Balance Sheet December 31, 2011 and 2010
	2011		2010
Assets
Cash	$	1	$	12
Accounts receivable		306		229
Inventory		158		196
Prepaid expenses		8		6
Total current assets		473		443
Property, plant, and equipment		509		430
Less accumulated depreciation		(85)		(71)
Net property, plant, and equipment		424		359
Long-term investments		25		32
Total assets	$	922	$	834
Liabilities and Stockholders' equity
Accounts payable	$	301	$	225
Accrued liabilities		70		80
Income taxes payable		72		63
Total current liabilities		443		368
Bonds payable		198		172
Total liabilities		641		540
Common stock		163		202
Retained earnings		118		92
Total stockholders’ equity		281		294
Total liabilities and stockholders' equity	$	922	$	834

Groton Company Income Statement For the Year Ended December 31, 2011
Sales			$	754
Cost of goods sold				448
Gross margin				306
Selling and administrative expenses				222
Net operating income				84
Non operating items:
Gain on sale of investments	$	6
Loss on sale of equipment		(2)		4
Income before taxes				88
Income taxes				23
Net income			$	65

During 2011, Groton sold some equipment for $19 that had cost $31 and on which there was accumulated depreciation of $10. In addition, the company sold long-term investments for $13 that had cost $7 when purchased several years ago. A cash dividend was paid during 2011 and the company repurchased $39 of its own stock. Groton did not retire any bonds during 2011.