Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory Prepaid expenses Total current assets Property and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 10% Total liabilities Stockholders' equity: Common stock, $10 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 19,000 230,000 330,000 10,000 589,000 890,000 $1,479,000 $ 280,000 320,000 600,000 $ 120,000 759,000 879,000 $1,479,000 Castile Products, Inc. Income Statement For the Year Ended December 31 Sales $4,000,000 Cost of goods sold 1,323,000 Gross margin 2,677,000 Selling and administrative expenses 650,000 Net operating income 2,027,000 Interest expense 32,000 Net income before taxes 1,995,000 Income taxes (30%) 598,500 Net income $1,396,500