Forten Company, a merchandiser, recently completed its calendar-year 2017 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 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 $ 55,900 77,500 54,625 255,800 1,975 389,900 112,000 71,810 281,656 1,250 410,616 153,500 (38,625 (48,000) Total assets $525,491 $453,900 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 $ 57,141 $120,675 6,800 127,475 52,750 180,225 11,200 68,341 63,000 131,341 170,750 41,500 181,900 154,250 119,425 $525,491 $453,900 Total liabilities and equity FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost oi gooas sola Gross profit Operating expenses $602,500 289,000 313,500 Depreciation expense $ 24,750 Other expenses 136,400 161,150 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income (9,125) 143,22!5 29,850 $113,375