The following is the balance sheet and income statement of Ronaldo Corporation: [08 Marks] Statement of Financial Position Ending Beginning Balance Balance Cash $ 41,000 $ 20,000 Accounts receivable 43,000 57,000 Inventory 66,000 53,000 Prepaid expenses 14,000 11,000 Long-term investments 310,000 240,000 Plant and equipment 580,000 580,000 Accumulated depreciation ( 369,000) ( 340,000) Total assets $685,000 $621,000 Accounts payable $ 45,000 $ 27,000 Accrued liabilities 14,000 19,000 Taxes payable 32,000 15,000 Bonds payable 70,000 110,000 Deferred taxes 29,000 25,000 Common stock 90,000 70,000 Retained earnings 405,000 355,000 Total liabilities and owners’ equity $685,000 $621,000 Income Statement Sales $540,000 Cost of goods sold 220,000 Gross margin 320,000 Selling and administrative expense 200,000 Net operating income 120,000 Income taxes 36,000 Net income