The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory Prepaid expenses Total current assets Property and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 11% Total liabilities Stockholders' equity: Common stock, $5 per value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 20,000 250,000 380,000 9,000 659,000 870,000 $1,529,000 260,000 370,000 630,000 $ 180,000 719,000 899,000 $1,529,000 Castile Products, Inc. Income Statement For the Year Ended December 31 Sales $3,600,000 Cost of goods sold 1,306,500 Gross margin 2,293,500 Selling and administrative expenses 600,000 Net operating income 1,693,500 Interest expense 40, 700 Net income before taxes 1,652,800 Income taxes (30%) 495, 840 Net income $1,156,960