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 companys income statement and balance sheets follow.

FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016

	2017	2016
Assets
Cash	$58,900	$79,500
Accounts receivable	74,830	56,625
Inventory	284,656	257,800
Prepaid expenses	1,270	2,015
Total current assets	419,656	395,940
Equipment	151,500	114,000
Accum. depreciationEquipment	(39,625)	(49,000)
Total assets	$531,531	$460,940
Liabilities and Equity
Accounts payable	$59,141	$123,675
Short-term notes payable	11,800	7,200
Total current liabilities	70,941	130,875
Long-term notes payable	62,000	54,750
Total liabilities	132,941	185,625
Equity
Common stock, $5 par value	174,750	156,250
Paid-in capital in excess of par, common stock	43,500	0
Retained earnings	180,340	119,065
Total liabilities and equity	$531,531	$460,940

FORTEN COMPANY Income Statement For Year Ended December 31, 2017

Sales		$612,500
Cost of goods sold		291,000
Gross profit		321,500
Operating expenses
Depreciation expense	$26,750
Other expenses	138,400	165,150
Other gains (losses)
Loss on sale of equipment		(11,125)
Income before taxes		145,225
Income taxes expense		32,650
Net income		$112,575

Additional Information on Year 2017 Transactions

1. The loss on the cash sale of equipment was $11,125 (details in b).
2. Sold equipment costing $64,875, with accumulated depreciation of $36,125, for $17,625 cash.
3. Purchased equipment costing $102,375 by paying $42,000 cash and signing a long-term note payable for the balance.
4. Borrowed $4,600 cash by signing a short-term note payable.
5. Paid $53,125 cash to reduce the long-term notes payable.
6. Issued 3,100 shares of common stock for $20 cash per share.
7. Declared and paid cash dividends of $51,300.

I VINILI LUI RII Statement of Cash Flows For Year Ended December 31, 2017 Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operations: Accounts receivable increase Inventory increase Prepaid expense decrease Accounts payable decrease Depreciation expense Loss on disposal of equipment $ 0 Net cash provided by operating activities Cash flows from investing activities 0 Net cash provided by investing activities Cash flows from financing activities: 0 $ 0 Net increase (decrease) in cash Cash balance at beginning of year Cash balance at end of year $ 0