The financial statements for Royale and Cavalier companies are summarized here: er Balance Sheet Cash Accounts Receivable, Net Inventory Equipment, Net Other Assets 4,000 128,000 568,000 149,000 34,000 54,000 25,000 43,000 178,000 55,000 Total Assets $943,000 $355,000 $ 138,000 208,000 489,000 59,000 49,000 $ 33,000 73,000 219,000 13,000 17,000 Current Liabilities Note Payable (long-term) Common Stock (par $20) Additional Paid-in Capital Retained Earnings Total Liabilities and Stockholders' Equity $943,000 $355,000 Income Statement Sales Revenue Cost of Goods Sold Other Expenses $827,000 489,000 249,000 $307,000 159,000 104,000 $ 89,000 S 44,000 Net Income Other Data Per share price at end of year Selected Data from Previous Year Accounts Receivable, Net S 18.00 S 10.00 Note Payable (long-term) Equipment, Net Inventory Total Stockholders' Equity S 56,000 208,000 568,000 104,000 597,000 S 23,000 73,000 178,000 47,000 249,000 These two companies are in the same business and state but different cities. Each company has been in for about 10 years. Both companies received an unqualified audit opinion on the financial statements. Royale Company wants to borrow $84,000 cash and Cavalier Company is asking for $39,000. The loans will be for a two-year period. Both compani but Ca es estimate bad debts based on an aging analysis, valier has estimated slightly higher uncollectible rates than Royale. Neither company issued stock in the current year. Assume the end-of-year total assets and net equipment balances approximate the year's average and all sales are on account