SITUATION 2 At the beginning of 2011, Mary Abrahams purchased a small business, the Maitz Company, whose income statement and balance sheets are shown below. Income Statement for the Maitz Company for 2011 Sales Cost of goods sold Gross profits Operating expenses: $175,000 105000) 70,000 5000 20,000 26000 Administrative cxpenses Selling expenses s(51,000) Total operating expenses Operating profits Interest expense Profits before taxes Taxes Net profits 19,000 16,000 S 8000 (3,000) Balance Sheets for the Maitz Company for 2010 and 2011 Assets Current assets: 2010 2011 Cash Accounts receivable Inventory 8,000 10,000 20,000 25,000 $45,000 55,00D 15,000 22,000 Total current assets Fixed assets $50,000 55000 (15,000) 20000) 35,000 35,00D 10,000 100,000 Gross fixed assets Accumulated depreciation Net fixed assets Other assets TOTAL ASSETS