Corporal Sterling was Mr. Krabs' former Navy partner. A prank was pulled on him where he got stuffed into Mr. Krabs' Navy locker, and Mr. Krabs eventually forgot about him. He died in the locker, and later, in "Squidward in Clarinetland," his skeleton was found. It was most likely dumped in the trash later in the episode.
"We paid ten dollars for this?"
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