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 $ 657,500 Cost of goods sold 300,000 Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) 357,500 $ 147,400 35,750 183,150 Loss on sale of equipment Income before taxes (20,125) Income taxes expense Net income 154,225 45,250 $ 108,975 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets $ 72,400 88,420 $ 88,500 65,625 266,800 2,195 298,156 1,360 460,336 423,120 142,500 (44,125) $ 558,711 123,000 (53,500) $ 492,620