Recent financial statements for Madison Company are given below. Account balances at the beginning of the company's fiscal year were accounts receivable, $195,000, and inventory, $417,000. All sales were on account. MADISON COMPANY Balance Sheet June 30 Assets Current assets: Cash Accounts receivable, net Merchandise inventory Prepaid expenses Total current assets Property and equipment, net Total assets Liabilities and Shareholders' Equity Liabilities: Current liabilities Bonds payable, 10% Total liabilities Shareholders' equity: Common shares, 20,000 Retained earnings Total shareholders' equity Total liabilities and shareholders' equity $ 40,000 245,000 483,000 9,000 777,000 823,000 $1,600,000 $ 300,000 300,000 600,000 $100,000 900,000 1,000,000 $1,600,000