Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, and (4) all debits to Accounts Payable reflect cash payments for inventory. FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $ 682,500 Cost of goods sold 305,000 Gross profit 377,500 Operating expenses (excluding depreciation) $ 152,400 Depreciation expense 40,750 193,150 Other gains (losses) Loss on sale of equipment (25,125) Income before taxes 159,225 Income taxes expense 52,250 Net income $ 106,975 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year Assets Cash $ 79,900 $ 93,500 Accounts receivable 95,970 70,625 Inventory 305,656 271,800 Prepaid expenses 1,410 2,295 Total current assets 482,936 438,220 Equipment 137,500 128,000 Accumulated depreciationEquipment (46,625) (56,000) Total assets $ 573,811 $ 510,220 Liabilities and Equity Accounts payable $ 73,141 $ 144,675 Long-term notes payable 71,000 78,750 Total liabilities 144,141 223,425 Equity Common stock, $5 par value 192,750 170,250 Paid-in capital in excess of par, common stock 67,500 0 Retained earnings 169,420 116,545 Total liabilities and equity $ 573,811 $ 510,220 Additional Information on Current Year Transactions The loss on the cash sale of equipment was $25,125 (details in b). Sold equipment costing $106,875, with accumulated depreciation of $50,125, for $31,625 cash. Purchased equipment costing $116,375 by paying $70,000 cash and signing a long-term notes payable for the balance. Paid $54,125 cash to reduce the long-term notes payable. Issued 4,500 shares of common stock for $20 cash per share. Declared and paid cash dividends of $54,100