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 Cost of goods sold Gross profit Operating expenses (excluding depreciation) 132,400 Depreciation expense 20,750 Other gains toase) Loon on sale of equipment Income before taxen Income taxon expenne Not income $ 582,500 285,000 297,500 153, 150 (5,125) 139, 225 24,250 0114,975 FORTEN COMPANY Comparative Balance Sheetn Docomber 31 Current Year Prior Year Assets Cash Accounts receivablo Inventory Prepaid expension Total current assets Equipment Accumulated depreciation Equipment Total ante Liabilities and Equity Accounts payable Long-term notes payable Total liabilities 349,800 65, 310 275, 656 1,250 392,516 157, 500 (36,625) 3 513,391 3.73,500 50,625 251, 800 1,875 377,00 108,000 (46,000) $ 439,800 $ 53,141 75,000 120, 141 9 114,675 54,750 169, 925 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 49,300 65,010 275,656 1,250 392,516 157,500 (36,625) 513,391 $ 73,500 50, 625 251,800 1.075 377,000 100,000 146,000) 439,800 Assets Cash Accounts receivable Inventory Prepaid expennen Total current at Equipment Accumulated depreciation Equipment Totalanta Liabilities and Equity Accounts payable long-term notes payablo Total liabilition Equity Common stock, 35 par value Paid-in capital in excent of pat, common stock Retained earnings Total liabilities and equity 53,141 25,000 120/141 114,675 54,750 1945 162,750 33,500 185,000 513,391 150, 250 0 120,125 3.439,800 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $5,125 (details in b). b. Sold equipment costing $46,875, with accumulated depreciation of $30,125, for $11,625 cash. c. Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term notes payable for the balance d. Paid $46,125 cash to reduce the long-term notes payable. e. Issued 2.500 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $50,100. FORTEN COMPANY Statement of Cash Flows For Current Year Ended December Cash fows from operating activities (indirect method) Adjustments to reconcile not income to net cash provided by operations come statementems not affecting cash Changes in current assets and current Cash flows from investing activities Cash flows from financing activities 0 5 O 3 0 Net increase (decrease in cath Cash balance at December 31, prior year Cash balance at December 31, current year FORTEN COMPANY Statement of Cash Flows (partial) For Current Year Ended December 31 Cash flows from operating activities (direct method) $ 0