Q3: COMPARE the performance of 2 years from the given financial statements of Black Barn Company and justify your findings (7 Marks) Black Barn Company Income Statement (2007) Sales $8,000,000 Cost of goods sold 5,260,000 Gross profit 2,740,000 Selling and administrative expenses 1,500,000 Operating profit 1,240,000 Interest expenses 140,000 Income before tax 1,100,000 Tax expense 440,000 Net income $660,000 Balance Sheet Cash Accounts receivable Inventory Total current assets Fixed assets Total assets 2007 2006 $200,000 $50,000 1,200,000 950,000 1,840,000 1,500,000 3,240,000 2,500,000 3,200,000 3,000,000 $6,440,000 $5,500,000 Accounts payable Bank loan Total current liabilities Bonds payable Total liabilities Common stock(130,000 shares) Retained earnings Total liabilities & equity 800,000 720,000 600,000 100,000 1,400,000 820.000 900,000 1,000,000 2,300,000 1,820,000 300,000 300,000 3,840,000 3,380,000 $6,440,000 $5,500,000 Note: The common shares are trading in the stock market for $40 each