The following income statement and balance sheet for Virtual Gaming Systems are provided.

VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31, 2015
Net sales		$3,046,000
Cost of goods sold		1,952,000
Gross profit		1,094,000
Expenses:
Operating expenses	$860,000
Depreciation expense	28,000
Loss on sale of land	8,200
Interest expense	16,000
Income tax expense	50,000
Total expenses		962,200
Net income		$ 131,800

VIRTUAL GAMING SYSTEMS Balance Sheet December 31
	2015	2014
Assets
Current assets:
Cash	$188,000	$146,000
Accounts receivable	83,000	62,000
Inventory	107,000	137,000
Prepaid rent	12,200	6,240
Long-term assets:
Investment in bonds	107,000	0
Land	212,000	242,000
Equipment	272,000	212,000
Less: Accumulated depreciation	(71,000)	(44,000)
Total assets	$910,200	$761,240
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$ 68,000	$ 115,840
Interest payable	6,400	3,200
Income tax payable	16,000	14,200
Long-term liabilities:
Notes payable	287,000	227,000
Stockholders' equity:
Common stock	302,000	302,000
Retained earnings	230,800	99,000
Total liabilities and stockholders