Forten Company, a merchandiser, recently completed its calendar-year 2013 operations. 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 debits 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 2013 2012 Assets 43,649 62,500 Cash Accounts receivable 65.825 51,625 274,156 249.800 Merchandise inventory Prepaid expenses 1.220 1.625 143,025 101.000 Equipment Accum. depreciation Equipment (33,850) (41,000) Total assets 494,025 425,550 Liabilities and Equity 59,975 108,350 Accounts payable Short-term notes payable 6.200 4,100 Long-term notes payable 37,625 33,500 153,250 145.250 Common stock, $5 par value Paid-in capital in excess of par, common stock 24,000 Retained earnings 212,975 134.350 Total liabilities and equity 494,025 425,550 FORTEN COMPANY Income Statement For Year Ended December 31, 2013 Sales 587,500 Cost of goods sold 287,000 Gross profit 300,500 Operating expenses Depreciation expense 18,100 Other expenses 128.100 146.200 ther gains (losses) Loss on sale of equipment 025) Income before taxes 150.275 Income taxes expense 26,250 124,025 Net income