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) ali 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 $ 637,500 Cost of goods sold 296000 Gross profit 343,500 perating expenses (excluding depreciation) 5 143,400 Depreciation expense 175,150 Other gains (losses) Loss on sale of equipment (16.125 Income before taxes 150, 225 Income taxes expense 39.650 Net income $ 110,575 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 66,400 82,380 292,156 1,320 442,256 146,500 (42 125) $ 546,631 $ 84,500 61,625 262,880 2,115 411, 948 119,000 (51,500) $ 478,540 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable 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 $ 64,141 22,800 136,941 $ 131,175 67 958 199,125 161,250 179,250 54,888 176, 440 $546,631 118,165 $ 478,548 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $16,125 (details in b). b. Sold equipment costing $79.875. with accumulated depreciation of $41.125, for $22,625 cash. c. Purchased equipment costing $107.375 by paying $52000 cash and signing a long-term notes payable for the balance d. Paid $50.525 cash to reduce the long-term notes payable e. Issued 3.600 shares of common stock for $20 cash per share, 1. Declared and paid cash dividends of $52,300 FORTEN COMPANY Spreadsheet for Statement of Cash Flows For Current Year Ended December 31 December 31. Prior Analysis of Changes Year Dehit Credit December 31 Current Year $ 60,400 Balance sheetdebit Cash Accounts receivable Inventory Prepaid expenses Equipment 84,500 61.625 262,800 2,115 119.000 530.040 5 3 Balance sheet-credit Accumulated depreciation Equipment Accounts payable Long-term notes payable Common stock, 35 par value Paid-in capital in excess of par value, common stock Retained earnings 51.500 131,175 67.950 101,250 0 118.106 530.040 S Statement of cash flows Operating activities Investing activities Financing activities Non cash investing and financing activities Purchase of equipment financed by long-term notes payable