The following is the balance sheet of Korver Supply Company at December 31, 2015.

KORVER SUPPLY COMPANY Balance Sheet At December 31, 2015 Assets
Cash	$120,000
Accounts receivable	300,000
Inventories	200,000
Furniture and fixtures, net	150,000
Total assets	$770,000
Liabilities and Shareholders' Equity
Accounts payable (for merchandise)	$190,000
Note payable	200,000
Interest payable	6,000
Common stock	100,000
Retained earnings	274,000
Total liabilities and shareholders' equity	$770,000

Transactions during 2016 were as follows:

1. Sales to customers on account	$800,000
2. Cash collected from customers	780,000
3. Purchase of merchandise on account	550,000
4. Cash payment to suppliers	560,000
5. Cost of merchandise sold	500,000
6. Cash paid for operating expenses	160,000
7. Cash paid for interest on note	12,000

The note payable is dated June 30, 2015 and is due on June 30, 2017. Interest at 6% is payable annually on June 30. Depreciation on the furniture and fixtures for the year is $20,000. The furniture and fixtures originally cost $300,000.