Forten Company, a merchandiser, recently completed its calendar-year 2016 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 companys income statement and balance sheets follow.

FORTEN COMPANY Comparative Balance Sheets December 31, 2016 and 2015 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term notes payable Total liabilities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity FORTEN COMPANY Income Statement For Year Ended December 31, 2016 Sales 587,500 287,000 Cost of goods sold 300,500 Gross profit Operating expenses 18,100 Depreciation expense 128.100 146,200 Other expenses Other gains (losses) (4,025 Loss on sale of equipment 150,275 Income before taxes 26,250 Income taxes expense 124,025 Net income 2016 2015 43,649 62,500 65,825 51,625 274,156 249,800 1,220 1,625 384,850 365,550 143,025 101,000 (33850) (41,000) 494,025 425,550 59,975 108,350 6.200 4,100 66,175 112,450 33,500 37,625 103,800 145,950 153,250 145.250 24,000 212,975 134.350 494,025 425,550