Information for Vaughn Manufacturing is given below: Vaughn Manufacturing Balance Sheet December 31, 2018 Assets Liabilities and Equity Cash $287000 Accounts payable $ 638000 Accounts receivable (net) 1945000 Income taxes payable 194000 Inventories 2448000 Miscellaneous accrued payables 228000 Plant and equipment, Bonds payable (8%, due 2020) 1900000 net of depreciation 1980000 Preferred stock ($100 par, 6% Patents 258000 cumulative nonparticipating) 750000 Other intangible assets Common stock (no par, 60,000 75400 $6993400 Total Assets shares authorized, issued and outstanding) 1126000 Retained earnings 2381400 Treasury stock-1500 shares of preferred (224000) Total Liabilities and Equity $6993400 Vaughn Manufacturing Income Statement Year Ended December 31, 2018 Net sales $9300000 Cost of goods sold 5600000 Gross profit 3700000 Operating expenses (including bond interest expense) 1500000 Income before income taxes 2200000 Income tax 450000 Net income $ 1750000 Additional information: There are no preferred dividends in arrears, the balances in the Accounts Receivable and Inventory accounts are unchanged from January 1, 2018, and there were no changes in the Bonds Payable, Preferred Stock, or Common Stock accounts during 2018. Assume that preferred dividends for the current year have not been declared. The rate of return for 2018 based on the year-end common stockholders' equity was 1705000 + 3452400. 1705000 = 3507400. 1750000 + 3462400. 1750000 + 3507400