Part A-10 pts-Submit to Assignment folder named "Ch 9 Milavce before" due by (see D2L). Review the Milavec Financial Statements (attached at the bottom of this assignment) and make some initial observations about the company. Come up with at least 3 observations about the company. (For example, by looking at the Income Statement you can see that the company is currently operating profitably). Your observations can be simple or complex, broad (like the example provided) or detailed. Think about the information you cannot see in the financial statements. What questions would you need answered before making a decision concerning Milevec? MILAVEC COMPANY Income Statements and Statements of Retained Earnings For the Years Ending December 31 Year 4 Year 3 Sales $900,000 $800,000 Cost of goods sold Beginning inventory 43,000 40,000 Purchases 637,000 483,000 Goods available for sale 680,000 523,000 Ending inventory 70,000 43,000 Cost of goods sold 610,000 480,000 Gross margin 290,000 320,000 Operating expenses 248,000 280,000 Income before taxes 42,000 40,000 Income taxes 17,000 18,000 Net income 25,000 22,000 Plus: Retained earnings, beginning balance 137,000 130,000 Less: Dividends 0 15,000 Retained earnings, ending balance $162,000 $137,000 Assets MILAVEC COMPANY Balance Sheets As of December 31 Year 4 Year 3 Cash $ 20,000 $ 17,000 Marketable securities 20,000 22,000 Notes receivable 4,000 3,000 Accounts receivable 50,000 56,000 Merchandise inventory 70,000 43,000 Prepaid expenses 4,000 4,000 Property, plant, and equipment (net) 340,000 310,000 Total assets $508,000 $455,000 Liabilities and Stockholders' Equity Accounts payable Salaries payable $ 40,000 $ 38,000 2,000 3,000 Taxes payable Bonds payable, 8% 4,000 2,000 100,000 100,000 Preferred stock, 6%, $100 par, cumulative 50,000 50,000 Common stock, $10 par 150,000 125,000 Retained earnings 162,000 137,000 Total liabilities and stockholders' equity $508,000 $455,000