Bancroft Company's income statement for Year 2 follows: Sales 178,750 Cost of goods sold 74,250 Gross margin 104,500 Selling and administrative expenses 37,625 Net operating income 66,875 Nonoperating items: Gain on sale of equipment 2,500 Income before taxes 69,375 Income taxes 27,750 Net income $41,625 Its balance sheet amounts at the end of Years 1 and 2 are as follows: Year 2 Year 1 Assets Cash $38,850 $20,825 Accounts receivable 55,250 34,250 Inventory 79,750 68,000 Prepaid expenses 2.625 5,250 Total current assets 176,475 128,325 Property, plant, and equipment 157,000 126,750 Less accumulated depreciation 41,350 32,975 Net property, plant, and equipment 115,650 93,775 Notes Receivable 10,000 0 Total assets $302,125 $222,100 Liabilities and Stockholders' Equity Accounts payable 78,250 64,000 Accrued liabilities 11,750 14,500 Income taxes payable 21,175 20,350 Total current liabilities $111,175 $98,850 Bonds payable 50,500 29.250 Total liabilities 161,675 128,100 Common stock 84,000 71,000 Retained earnings 56,450 23,000 Total stockholders' equity 140,450 94,000