The following is the December 31, 2003 balance sheet for the Epics Corporation.

(10 points)

Assets Liabilities Cash $ 70,000 Accounts Payable $ 100,000 Accounts Receivable 150,000 Notes Payable 120,000 Inventory 280,000 Bonds Payable 300,000 Total Current Assets $ 500,000 Total Liabilities $ 520,000 Plant and Equipment $1,250,000 Equity Less: Accum. Deprec. 250,000 Common Stock 300,000 Net plant and Equipment $1,000,000 Paid In Capital 200,000 Retained Earnings 480,000 Total Assets $1,500,000 Total Equity $ 980,000 Total Liab. & Equity $1,500,000

Sales for 2003 were $2,000,000, with the cost of goods sold being 55% of sales.  Depreciation expense was 10% of the gross plant and equipment at the beginning of the year.  Interest expense was 9% on the notes payable and 11% on the bonds payable.  Selling and administrative expenses were $200,000 and the firm’s tax rate is 40%.

Prepare an income statement.