P7-5A part (a,b) The ledgers of Mid City Galleries Inc. contain the following balances as of December 31, 2008.

P7-5A part (a,b)The ledgers of Mid City Galleries Inc. contain the following balances as of December 31, 2008. Advertising expense$123,000 Commissions expense on art sales1,200,000Depreciation expense (administrative)98,000 Dividend revenue50,000 Insurance expense600,000 Interest expense98,000 Inventory, January11,650,000 Inventory, December 311,424,000 Loss on the sale of office equipment21,300 Miscellaneous administrative expenses53,200 Miscellaneous selling expenses39,000 Net purchases3,200,000 Net sales9,275,000 Rent expense808,000 Freight-in232,000 Freight-out82,500 Utilities expense117,000 Wages and salaries 1,264,000Income taxes are calculated at 30 percent of income. The galleries had 90,000 shares of common stock outstanding for the entire year. Total assets amounted to $7,509,000, and common stockholder's equity was $3,975,400.