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, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 60,400 76,340 286,156 1,280 424,176 150,500 (40,125) $ 534,551 $ 80,500 57,625 258,800 2,035 398,960 115,000 (49.500) $ 464,460 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 Habilities 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 $ 60,141 12,180 72,241 61,500 133,741 $ 125, 175 7,400 132,575 55,750 188,325 173,250 48,000 179,560 $ 534,551 157,250 @ 118,885 $ 464,460 FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Net income $ 112,175 Adjustments to reconcile net income to net cash provided by operations: Depreciation expense 27750 Loss on disposal of equipment 12,125 Accounts receivable increase (18,715) Inventory increase (27,356) Prepaid expense decrease 755 Accounts payable decrease (65,034) 41,700 Net cash provided by operating activities Cash flows from investing activities Cash received from sale of equipment Cash paid for equipment