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 Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Loss on sale of equipment $ 617,500 292,000 325,500 $ 139,400 27,750 167,150 (12,125) Income before taxes Income taxes expense Net income FORTEN COMPANY Comparative Balance Sheets Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable December 31 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 146,225 34,050 $ 112,175 Current Year Prior Year $ 60,400 76,340 286,156 $ 80,500 57,625 258,800 1,280 2,035 424,176 398,968 115,000 150,500 (40,125) (49,500) $ 464,468 $ 534,551 $ 60,141 $ 125,175 73,600 163,150 133,741 188,325 173,250 157,258 48,000 179,560 118,385 $534,551 $464,460 a. The loss on the cash sale of equipment was $12,125 (details in b) b. Sold equipment costing $67,875, with accumulated depreciation of $37,125, for $18,625 cash c. Purchased equipment costing $103,375 by paying $44,000 cash and signing a long-term notes payable for the balance. d. Paid $48,925 cash to reduce the long-term notes payable. e. Issued 3,200 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $51,500.