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 Total assets $ 58,90079,500 56,625 257,800 2,015 395,940 114,000 49,000 $531,531 $460,940 74,830 284,656 1,270 419,656 151,500 39,625 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 stock Retained earnings $ 59,141 $123,675 7,200 130,875 54,750 185,625 11,800 70,941 62,000 132,941 156,250 174,750 43,500 180,340 119,065 $531,531 $460,940 Total liabilities and equity FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses $612,500 291,000 321,500 Depreciation expense $ 26,750 138,400 165,150 Other expenses Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 11,125 145,22!5 32,650 $112,575