P 10-7 Arrowbell Company is a growing company. Two years ago, it decided to expand in order to increase its production capacity. The company anticipates that the expansion program can be completed in another two years. Financial information for Arrowbell is as follows. ARROWBELL COMPANY Sales and Net Income Year Sales Net Income 2007 $2,568,660 $145,800 2008 2,660,455 101,600 2009 2,550,180 52,650 2010 2,625,280 86,800 2011 3,680,650 151,490 ARROWBELL COMPANY Balance Sheet December 31, 2011 and 2010 2011 2010 Assets Current assets: Cash $ 250,480 $ 260,155 Accounts receivable (net) 760,950 690,550 Inventories at lower-of-cost-or-market 725,318 628,238 Prepaid expenses 18,555 20,250 Total current assets 1,755,303 1,599,193 Plant and equipment: Land, buildings, machinery, and equipment 3,150,165 2,646,070 Less: Accumulated depreciation 650,180 525,650 Net plant and equipment 2,499,985 2,120,420 Other assets: Cash surrender value of life insurance 20,650 18,180 Other 40,660 38,918 Total other assets 61,310 57,098 Total assets $4,316,598 $3,776,711 Liabilities and Stockholders