\"Since I missed all the excitement while I was working on a different client, why don't you share the details of the transaction?\" demanded Lily. \"Well, ZonTech was carrying the investment at $5,100,000 and sold it to GreenSel for $8,000,000. So they booked a $2,900,000 gain on the transaction,\" Michael condentially replied. Lily looked troubled and nally conded to Michael, \"I'm enrolled in a CPA review course, and last week we studied long-term receivables and payables. I learned that generally accepted accounting principles (GAAP) require notes receivable due in more than one year to be carried at their present value. Wouldn't that affect the prot you reported?\" Michael looked at Lily like she was trying to put him on the spot and icily replied, \"I explained that ZonTech didn't incur any interest on this investment before the sale, so present value calculations aren't necessary! And, yes, the income statement we audited is consistent with GAAP.\" Zon Tech Income Statements For the four years ended December 31, 2004 (in 0005 except per share amounts} 2004 2003 2002 2001 Net Revenues and Gains $27,500 $26,300 $25,100 $20,900 Expenses and Losses Cost of Sales 15,200 12,150 9,845 9,200 Operating Expenses 3,160 3,075 2,890 2,300 Other 4,570 3,966 3,146 2,214 Taxes 1,690 2,671 3,318 2,515 Net Income $2,880 $4,438 $5,901 $4,671 Common Shares Outstanding 3,000 3,000 3,000 3,000