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

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VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31, 2018
Net sales		$3,011,000
Cost of goods sold		1,945,000
Gross profit		1,066,000
Expenses:
Operating expenses	$853,000
Depreciation expense	24,500
Loss on sale of land	7,500
Interest expense	12,500
Income tax expense	43,000
Total expenses		940,500
Net income		$ 125,500

VIRTUAL GAMING SYSTEMS Balance Sheets December 31
	2018	2017
Assets
Current assets:
Cash	$181,000	$139,000
Accounts receivable	76,000	55,000
Inventory	100,000	130,000
Prepaid rent	11,500	5,400
Long-term assets:
Investment in bonds	100,000	0
Land	205,000	235,000
Equipment	265,000	205,000
Less: Accumulated depreciation	(61,500)	(37,000)
Total assets	$877,000	$732,400
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$ 61,000	$ 76,000
Interest payable	5,000	2,500
Income tax payable	12,500	13,500
Long-term liabilities:
Notes payable	280,000	220,000
Stockholders' equity:
Common stock	295,000	295,000
Retained earnings	223,500	125,400
Total liabilities and stockholders equity	$877,000	$732,400