*Problem 24-3 Kingbird Corporation was formed 5 years ago through a public subscription of common stock. Daniel Brown, who owns 15% of the common stock, was one of the organizers of Kingbird and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On June 10, 2018, Daniel Brown approached the Topeka National Bank, asking for a 24-month extension on two $34,740 notes, which are due on June 30, 2018, and September 30, 2018 Another note of $6,020 is due on March 31, 2019, but he expects no difficulty in paying this note on its due date. Brown explained that Kingbird's cash flow problems are due primarily to the company's desire to finance a $297,240 plant expansion over the next 2 fiscal years through internally generated funds The commercial loan officer of Topeka National Bank requested the following financial reports for the last 2 fiscal years KINGBIRD CORPORATION BALANCE SHEET MARCH 31 Assets Cash Notes receivable Accounts receivable (net) Inventories (at cost) Plant & equipment (net of depreciation) 2018 2017 $18,040 147,260 132,340 105,650 1,445,350 $1,848,640 $12,400 131,030 125,790 49,690 1,431,190 $1,750,100 Total assets Liabilities and Owners' Equity Accounts payable Notes payable Accrued liabilities Common stock (130,000 shares, $10 par) Retained earnings $79,080 75,330 16,660 1,290,130 387,440 $1,848,640 $91,660 61,330 11,510 1,306,340 279,260 $1,750,100 Total liabilities and stockholders' equity Cash dividends were paid at the rate of $1 per share in fiscal year 2017 and $2 per share in fiscal year 2018 KINGBIRD CORPORATION INCOME STATEMENT FOR THE FISCAL YEARS ENDED MARCH 31 2018 2017 Sales revenue Cost of goods solda Gross margin Operating expenses Income before income taxes Income taxes (40%) Net income $2,971,790 1,533,470 1,438,320 852,540 585,780 234,312 $351,468 $2,699,340 1,433,480 1,265,860 777,590 488,270 195,308 $292,962