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 $ 617,500 Cost of goods sold 292,000 Gross profit Operating expenses (excluding depreciation) $ 139,400 Depreciation expense Other gains (losses) 325,500 27,750 167,150 Loss on sale of equipment Income before taxes (12,125) Income taxes expense Net income Assets Cash 146,225 34,050 $ 112,175 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 60,400 76,340 286,156 $ 80,500 57,625 258,800 Accounts receivable Prepaid expenses Inventory Total current assets. Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable 1,280 2,035 424,176 398,960 150,500 115,000 (40,125) (49,500) $ 534,551 $ 464,460 $ 60,141 72 500 $ 125,175 150