The following information comes from the accounting records of Hercep Ltd. for the first three years of its existence: Statement of Financial Position 2018 2019 2020 Assets Cash $22,000 $19,000 $25,000 Accounts receivable 66,500 50,000 140,000 Inventory 100,000 130,000 220,000 Capital assets (net) 420,000 450,000 460,000 Other assets 230,000 200,000 265,000 $838,500 $849,000 $1,110,000 Liabilities and equity Accounts payable $100,000 $50,000 $100,000 Long-term debt 180,000 230,000 460,000 Common shares 510,000 510,000 510,000 Retained earnings 48,500 59,000 40,000 $838,500 $849,000 $1,110,000 Statement of Earnings Sales $600,000 $750,000 $880,000 Cost of goods sold (330,000) (495,000) (616,000) Other expenses (160,000) (220,000) (218,000) 110,000 35,000 46,000 Income tax (33,000) (10,500) (13,800) Net income $77,000 $24,500 $32,200