Arch Associates reports the following comparative balance sheets and income statement information. Arch Associates Comparative Balance Sheets 12/31/Year 12/31/Year 1 2 Cash $14,400 $24,400 Accounts receivable 6,400 10,400 Prepaid insurance 12,400 10,400 Inventory 8,400 4,400 Property, plant and equipment 14,400 12,400 Total assets $56,000 $62,000 Accounts payable $10,400 $14,400 Salaries payable 12,400 6,400 Long term notes payable 12,800 10,800 Stockholders' equity 20,400 30,400 Total liabilities and equity $56,000 $62,000 Income Statement Year Ended 12/31/Year 2 Revenue Cost of goods sold Gross margin Operating expense Net income $118,000 52,000 66,000 32,000 $ 34,000