12 3A: Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, all sales or credit sales, all credits to Accounts Receivable reflect cash receipts from customers, All purchases of inventory are on credit, all debits to Accounts Payable reflect cash payments For inventory, and Other Expenses are paid in advance and are initially debited to prepaid expenses. Forten Company Income Statement For the Year Ended December 31, 2020 Sales $582,500 Cost of goods sold 285,000 Gross profit 297,500 Operating Expenses: Depreciation expense $20,750 Other expenses 132,400 153,150 Other gains/(losses): Loss on sale of equipment (5,125) Income before taxes 139,225 Income taxes expense 24,250 Net income $114,975 Forten Company Balance Sheet As of December 31, 2019 and 2020 2020 2019 Assets Cash $49,800 $73,500 Accounts receivable 65,810 50,625 Inventory 275,656 251,800 Prepaid expenses 1,250 1,875 Total current assets 392,516 377,800 Equipment 157,500 108,000 Accumulated depreciation - Equipment (36,625) (46,000) Total assets $513,391 $439,800 Liabilities and Equity Accounts payable $53,141 $114,675 Short-term notes payable 10,000 6,000 Total current liabilities 63,141 120,675 Long-term notes payable 65,000 48,750 Total liabiities 128,141 169,425 Equity Common stock, $5 par value 162,750 150,250 Paid-in-captial in excess of par, common stock 37,500 - Retained earnings 185,000 120,125 Total Equity 385,250 270,375 Total liabilities and equity $513,391 $439,800 Additional information: a. Loss on the cash sale of equipment $5,125 b. Sold equipment costing 46,875 Accumulated depreciation on equipment sold 30,125 Cash received for sale of equipment 11,625 c. Purchase price of equipment 96,375 Cash paid for equipment 30,000 Long-term note payable for equipment purchase 66,375 d. Borrowed cash by signing a short-term note payable 4,000 e. Cash paid to reduce the long-term notes payable 50,125 f. Issued $2500 that shares of common stock for $20 per share g. Declared and paid cash dividends 50,100