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 $ 587,500 Cost of goods sold 286,000 Gross profit Operating expenses (excluding depreciation) $ 133,400 Depreciation expense Other gains (losses) 301,500 21,750 155,150 Loss on sale of equipment Income before taxes (6,125) Income taxes expense Net income 140,225 25,650 $ 114,575 FORTEN COMPANY Comparative Balance Sheets December 31 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable 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. Current Year Prior Year $ 51,400 67,310 277,156 1,300 397,166 156,500 (37,125) $ 516,541 $ 54,141 74,800 128,941 164,250 39,000 184,350 $516,541 74,500 51,625 252,800 2,025 380,950 109,000 (46,500) $ 443,450 $ 116,175 55,950 172,125 151,250 120,075 $ 443,450