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 Income before taxes. Income taxes expense Net income $632,500 295,000 337,500 $142,400 30,750 173,150 (15,125) 149,225 38,250 $110,975 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable. Short-term notes payable Total current liabilities Long-term notes payable Total liabilities FORTEN COMPANY Comparative Balance Sheets December 31 Current Year $ 64,900 80,870 290,656 1,310 437,736 147,500 (41,625) $543,611 $ 63,141 Prior Year $ 83,500 60,625 261,800 2,095 408,020 118,000 (51,000) $475,020 $129,675 8,000 13,000 76,141 137,675 60,000 58,750 196,425 136,141