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Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, ( 1 ) all sales are credit sales, (

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 $ 677,500
Cost of goods sold 304,000
Gross profit 373,500
Operating expenses (excluding depreciation) $ 151,400
Depreciation expense 39,750191,150
Other gains (losses)
Loss on sale of equipment (24,125)
Income before taxes 158,225
Income taxes expense 50,850
Net income $ 107,375
FORTEN COMPANY
Comparative Balance Sheets
December 31
Current Year Prior Year
Assets
Cash $ 78,400 $ 92,500
Accounts receivable 94,46069,625
Inventory 304,156270,800
Prepaid expenses 1,4002,275
Total current assets 478,416435,200
Equipment 138,500127,000
Accumulated depreciationEquipment (46,125)(55,500)
Total assets $ 570,791 $ 506,700
Liabilities and Equity
Accounts payable $ 72,141 $ 143,175
Long-term notes payable 71,20077,550
Total liabilities 143,341220,725
Equity
Common stock, $5 par value 191,250169,250
Paid-in capital in excess of par, common stock 66,0000
Retained earnings 170,200116,725
Total liabilities and equity $ 570,791 $ 506,700
Additional Information on Current Year Transactions
The loss on the cash sale of equipment was $24,125(details in b).
Sold equipment costing $103,875, with accumulated depreciation of $49,125, for $30,625 cash.
Purchased equipment costing $115,375 by paying $68,000 cash and signing a long-term notes payable for the balance.
Paid $53,725 cash to reduce the long-term notes payable.
Issued 4,400 shares of common stock for $20 cash per share.
Declared and paid cash dividends of $53,900.

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