QUESTION 1 Please use the tables below to answer the following question: 1) Compute Current Assets minus Liabilities: TABLE 3.1 Drake Manufacturing Company Balance Sheet (in Thousands of Dollars) December 31, 2016 December 31, 2015 ASSETS Cash $ 2,540 $ 2,081 Marketable securities 1,800 1,625 18,320 16,850 Accounts receivable, net Inventories 27,530 26,470 Total current assets. $50,190 $47,026 Plant and equipment $43,100 Less: Accumulated depreciation 11,400 Net plant and equipment $31,700 $30,000 Total assets $81,890 $77,026 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 9,721 $ 8,340 Notes payable-bank (10%) 8,500 5,635 Accrued taxes payable 3,200 3,150 Other current liabilities 2,102 1,750 Current portion of long-term debt 2,000 2,000 Total current liabilities $25,523 $20,875 Long-term debt (9% % mortgage bonds)" $22,000 $24,000 Total liabilities $47,523 $44,875 Common stock ($10 par value) Contributed capital in excess of par Retained earnings Total stockholders' equity $34,367 $32,151 Total liabilities and stockholders' equity $81,890 $77,026 TABLE 3.2 Drake Manufacturing Company Income Statement (in Thousands of Dollars) For the Year Ended December 31, 2016 Net sales $112,760 Cost of sales 85,300 Gross margin $ 27,460 Operating expenses: Selling $ 6,540 General and administrative" 9,400 Total operating expenses 15,940 Earnings before interest and taxes (EBIT) $ 11,520 Interest charges: Interest on bank notes S 850 Interest on mortgage bonds 2,310 Total interest charges 3,160 Earnings before taxes (EBT) $ 8,360 Federal and state income taxes at a combined 40% rate 3,344 $ 5,016 Earnings after taxes (EAT) and available for common stockholders OTHER INFORMATION: Dividends paid on common stock $ 2,800 Earnings retained in the firm $ 2,216 Shares outstanding (000) 1,300 Market price per share $ 24 Book value per share S 26.44 Earnings per share $ 3.86 Dividends per share $ 2.15 $13,000 10,000 11,367 $39,500 9,500 $13,000 10,000 9,151