Forten Company, a merchandiser, recently completed its calendar-year 2017 operations. For the year1) 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 income statement and balance sheets follow FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets $.49,800 73,500 50,625 251,800 1,875 377,800 108,000 46,000 513,391 439,800 65,810 275,656 1,250 392,516 157,500 36,625 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 stoclk Retained earnings Total liabilities and equity $.53,141 114,675 6,000 120,675 65,00048,750 169,425 10,000 63,141 128,141 162,75% 150, 25% 37,500 185,000120,125 513,391 439,800 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses $582,500 285,008 297,500 $ 20,750 132,400 Depreciation expense Other expenses Other gains (losses) 153,150 Loss on sale of equipment Income before taxes Income taxes expense Net income 5,125 139,225 24,250 $ 114,975