Cepeda Company manufactures backpacks. During 2014, Cepeda issued bonds at 10% interest and used the cash proceeds to purchase treasury stock. The following financial information is available for Cepeda Company for the years 2014 and 2013.

		2014		2013
Sales revenue		$9,000,000		$9,000,000
Net income		2,240,000		2,500,000
Interest expense		500,000		140,000
Tax expense		670,000		750,000
Dividends paid on common stock		890,000		1,026,000
Dividends paid on preferred stock		300,000		300,000
Total assets (year-end)		14,500,000		16,875,000
Average total assets		15,687,500		17,763,000
Total liabilities (year-end)		6,000,000		3,000,000
Avg. total common stockholders