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 $ 22,000 210,000 310,000 10,000 Total current assets Property and equipment, net 552,000 810,000 Total assets $1,362,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 11% $ 230,000 330,000 560,000 $ 130,000 Total liabilities Stockholders' equity Common stock, $10 par value Retained earnings 672,000 802,000 $1,362,000 Total stockholders' equity Total liabilities and equity Castile Products, Inc. Income Statement For the Year Ended December 31 Sales Cost of goods sold $2,260,000 1,250,000 Gross margin Selling and administrative expenses 1,010,000 630,000 Net operating income Interest expense 380,000 36,300 Net income before taxes Income taxes (30%) 343,700 103,110 Net income $ 240,590 Account balances at the beginning of the year were: accounts receivable, $170,000; and inventory, $320,000. All sales were on account