Question Three (25 Marks) Rockford Company's comparative balance sheet for 2019 and the company's income ning br statement for the year follow: Cavallo Assets Cash... Accounts receivable.. Inventory. Prepaid expenses... Plant and equipment.. Less accumulated depreciation Long-term investments.. Total assets... ROCKFORD COMPANY Comparative Balance Sheet December 31, 2019, and 2018 (dollars in millions) 2019 2018 $26 $10 180 270 dec) 205 160 17 20 430 (218) 309 (194) 60 $700 75 $650 Liabilities and Stockholders' Equity Accounts payable $230 $310 M Accrued Liabilities. 70 60 Bonds payable.... 135 40 Deferred income taxes.. 15 8 Common stock... 140 no 140 E Retained earnings.... 110 Total liabilities and stockholders' equity.... $700 92 $650 Sales..... Less cost of sales.. Gross margin Less operating expenses. Net operating income. Nonoperating items: Loss on sale of equipment. Income before taxes..... Less income taxes....... Net income... ROCKFORD COMPANY Income Statement For the Year ended December 31, 2019 (dollars in millions) $1,000 530 470 352 118 (4) 114 48 $ 66