The following is the balance sheet of Korver Supply Company at December 31, 2020 (prior year). KORVER SUPPLY COMPANY Balance Sheet At December 31, 2020 Assets Cash $185,000 Accounts receivable 320,000 Inventory 270,000 Furniture and fixtures (net) 205,000 Total assets $980,000 Liabilities and Shareholders' Equity Accounts payable (for merchandise) $250,000 Notes payable 260,000 Interest payable 7,800 Common stock 100,000 Retained earnings 362,200 Total liabilities and shareholders' equity $980,000 Transactions during 2021 (current year) were as follows: 1. Sales to customers on account $980,000 2. Cash collected from customers 960,000 3. Purchase of merchandise on account 500,000 4. Cash payment to suppliers 510,000 5. Cost of merchandise sold 450,000 6. Cash paid for operating expenses 340,000 15,600 7. Cash paid for interest on notes Additional Information: The notes payable are dated June 30, 2020, and are due on June 30, 2022. Interest at 6% is payable annually on June 30. Depreciation on the furniture and fixtures for 2021 is $38,000. The furniture and fixtures originally cost $480,000. Required: