Forten Company's current year income statement, comparative balance sheets, and additional information follow. 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, and (4) all debits to Accounts Payable reflect cash payments for inventory. FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $ 592,500 Cost of goods sold 287,000 Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) 305,500 $ 134,400 22,750 157,150 Loss on sale of equipment Income before taxes (7,125) Income taxes expense Net income 141,225 27,050 $ 114,175 Assets Cash Accounts receivable FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 52,900 68,810 278,656 $ 75,500 52,625 253,800 Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable 1,270 401,636 155,500 (37,625) $ 519,511 $ 55,141 74,600 1,995 383,920 110,000 (47,000) $ 446,920 $ 117,675 57,150 Long-term notes payable Total liabilities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $7,125 (details in b). 129,741 174,825 165,750 152,250 40,500 0 183,520 119,845 $ 519,511 $ 446,920 b. Sold equipment costing $52,875, with accumulated depreciation of $32,125, for $13,625 cash. c. Purchased equipment costing $98,375 by paying $34,000 cash and signing a long-term notes payable for the balance. d. Paid $46,925 cash to reduce the long-term notes payable. e. Issued 2,700 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $50,500.