Forten Company, a merchandiser, recently completed its calendar-year 2018 operations. For the ye 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, balance sheets, and additional information follow. FORTEN COMPANY Comparative Balance Sheets December 31, 2818 and 2817 2818 2817 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets $ 64,98 83,58e 68,625 261,88e 2,895 488,828 118,88e 51,eae 543,611 475,828 88,87e 298,656 1,318 437,736 147,58e 41,625 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 $63,141 129,675 8,880 137,675 58,758 196,425 13,886 76,141 68,80 136,141 182,75e 52,58e 172,228 165,258 113, 345 543,611 475,828 Total liabilities and equity FORTEN COMPANY Income Statement For Year Ended December 31, 2818 Sales Cost of goods sold Gross profit Operating expenses 632,58e 295,88e 337,58e Depreciation expense $30,75e Other expenses Other gains (losses) 142,488 173,158 Loss on sale of equipment Income before taxes Income taxes expense Net income (15,125 149,225 s 118,975 Additlonel Informatlon on Yeer 2018 Transactlons a. The loss on the cash sale of equipment was $15,125 (details in b). b. Sold equipment costing $76,875, with accumulated depreciation of $40125, for $21,625 cash. c. Purchased equipment costing $106,375 by paying $50,000 cash and signing a long-term note payable for the balance d. Borrowed $5,000 cash by signing a short-term note payable. e. Paid $55,125 cash to reduce the long-term notes payable. t. Issued 3,500 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $52100