Samuel Cox, owner of Cox Video Center, sent the income statement shown below to several of his creditors who had asked for financial statements. The business is a sole proprietorship that sells audio and other electronic equipment. One of the creditors looked over the income statement and reported that it did not conform to generally accepted accounting principles. Cox Video Center Income Statement December 31, 20x1 Cash Collected from Customers Cost of Goods Sold Merchandise Inventory, Jan. 1 Payments to Suppliers $697,000 $ 76,000 439,000 Less Merchandise Inventory, Dec. 31 Cost of Goods Sold: Gross Profit on Sales Operating Expenses Salaries of Employees Salary of Owner office Expense Depreciation Expense Income Tax of Owner Payroll Taxes Expense. Advertising and Other Selling Expenses Repairs Expense Insurance Expense Interest Expense Utility and Telephone Expense Legal and Audit Expense Miscellaneous Expense Total Expenses Net Loss from Operations Increase in Appraised Value of Land During Year Net Income 515,000 86,000 429,000 268,000 $ 81,300 30,000 31,800 21,440 8,800 9,800 23,700 12,800 5,200 12,800 19,300 4,300 29,300 290,540 (22,540) The following additional information was made available by Cox: 25,000 $ 2,460