1.70 points Forten Company, a merchandiser, recently completed its calendar year 2013 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, (4) all to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses The company's balance sheets and income statement follow. FORTEN COMPANY Comparative Balance Sheets December 31, 2013 and 2012 2012 2013 Assets Cash 49,800 73,500 Accounts receivable 65,810 50,625 Merchandise inventory 275.656 251.800 Prepaid expenses 1,250 1,875 Equipment 157,500 108,000 Accum, 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 Long-term notes payable 65,000 48,750 Common stock, $5 par value 162.750 150.250 Paid-in capital in excess of par, common stock 37,500 Retained earnings 185.000 120,125 Total liabilities and equity 513,391 439,800 FORTEN COMPANY Income Statement For Year Ended December 31, 2013 $582,500 Sales 285,000 Cost of goods sold 297,500 Gross profit Operating expenses 20,750 Depreciation expense 132,400 153,150 Other expenses Other gains (losses) Loss on sale of equipment (5,125) 139 225 Income before taxes 24 250 ncome taxes expense $114,975