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 $ $632,500$

Cost of goods sold $295,000$

Gross profit $337,500$

Operating expenses $($excluding depreciation$)$ $ $142,400$

Depreciation expense $30,750173,150$

Other gains $($losses$)$

Loss on sale of equipment $(15,125)$

Income before taxes $149,225$

Income taxes expense $38,250$

Net income $ $110,975$

FORTEN COMPANY

Comparative Balance Sheets

December $31$

Current Year Prior Year

Assets

Cash $ $64,900$ $ $83,500$

Accounts receivable $80,87060,625$

Inventory $290,656261,800$

Prepaid expenses $1,3102,095$

Total current assets $437,736408,020$

Equipment $147,500118,000$

Accumulated depreciation$$Equipment $(41,625)(51,000)$

Total assets $ $543,611$ $ $475,020$

Liabilities and Equity

Accounts payable $ $63,141$ $ $129,675$

Long$-$term notes payable $73,00066,750$

Total liabilities $136,141196,425$

Equity

Common stock, $$5$ par value $177,750160,250$

Paid$-$in capital in excess of par, common stock $52,5000$

Retained earnings $177,220118,345$

Total liabilities and equity $ $543,611$ $ $475,020$ Purchased equipment costing $$106,375$ by paying $$50,000$ cash and signing a long$-$term notes payablc

Paid $$50,125$ cash to reduce the long$-$term notes payable.

Issued $3,500$ shares of common stock for $$20$ cash per share.

Declared and paid cash dividends of $$52,100.$