Exercise 13-8 Selected Financial Ratios [LO13-2 LO13-3, LO13-4] The financial statements for Castile Products, Inc., are given below: Castile Products, Inc Balance Sheet December 31 Assets Current assets $ 18,000 180,000 380,000 10,000 Cash Accounts receivable, net Merchandise inventory Prepaid expenses 588,000 890,000 Total current assets Property and equipment, net Total assets Liabilities and Stockholders' Equity $1,478,000 Liabilities Current liabilities Bonds payable, 11% $ 240,000 330,000 570,000 $100,000 Total liabilities Stockholders' equity: Common stock, $10 par value Retained earnings 808,000 908,000 $1,478,000 Total stockholders' equity Total liabilities and equity Castile Products, Inc Income Statement For the Year Ended December 31 Sales Cost of goods sold $2,590,000 1,254,000 Gross margin Selling and administrative expenses 1,336,000 560,000 Net operating income Interest expense 776,000 36,300 Net income before taxes Income taxes (30%) 739,700 221,910 Net income $517,790