The following information was used to prepare the financial statements for Delta Chemical Company. Prepare the necessary notes to accompany the statements. Delta uses the LIFO inventory method on its financial statements. If the FIFO method were used, the ending inventory balance would be reduced by $50,000 and net income for the year would be reduced by $35,000 after taxes. Delta depreciates its equipment using the straight-line method. Revenue is generally recognized when inventory is shipped unless it is sold on a consignment basis. The current value of the equipment is $525,000, as contrasted to its depreciated cost of $375,000. Delta has borrowed $350,000 on a 10-year note at 14% interest. The note is due on July 1, 2018. Delta’s equipment has been pledged as collateral for the loan. The terms of the note prohibit additional long-term borrowing without the express permission of the holder of the note. Delta is planning to request such permission during the next fiscal year. The board of directors of Delta is currently discussing a merger with another chemical company. No public announcement has yet been made, but it is anticipated that additional shares of stock will be issued as part of the merger. Delta’s balance sheet will report receivables of $126,000. Included in this figure is a $25,000 advance to the president of Delta, $30,000 of notes receivable from customers, $10,000 in advances to sales representatives, and $70,000 of accounts receivable from customers. The reported balance reflects a deduction for anticipated collection losses.