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 \begin{tabular}{lrr} & For Current Year Ended December 31 & \\ Sales & $597,500 \\ Cost of goods sold & 288,000 \\ Gross profit & $135,400 & \\ Operating expenses (excluding depreciation) & \\ Depreciation expense & 23,750 & 159,150 \\ Other gains (losses) & \\ Loss on sale of equipment & (8,125) \\ Income before taxes & 142,225 \\ Income taxes expense & 28,450 \\ Net income & $113,775 \\ \hline \end{tabular} FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year 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 \begin{tabular}{rr} $54,400 & $76,500 \\ 70,310 & 53,625 \\ 280,156 & 254,800 \\ 1,280 & 2,005 \\ \hline 406,146 & 386,930 \\ 154,500 & 111,000 \\ (38,125) & (47,500) \\ \hline$522,521 & $450,430 \\ \hline$56,141 & $119,175 \\ 74,400 & 58,350 \\ \hline 130,541 & 177,525 \\ 167,250 & 153,250 \\ 42,000 & 0 \\ 182,730 & 119,655 \\ \hline$522,521 & $450,430 \\ \hline \end{tabular} Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $8.125 (detalls in b ). b. Sold equipment costing $55,875, with accumulated depreciation of $33,125, for $14,625 cash. c. Purchased equipment costing $99,375 by paying $36,000 cash and signing a long-term notes payable for the balance. d. Pald $47,325 cash to reduce the long-term notes payable. e. Issued 2,800 shares of common stock for $20 cash per share. 4. Dectared and paid cash dividends of $50,700. For Current Year Ended December 31 Cash flows from operating activities Adjustunents to reconcile net income to net cash provided by operations: Income stalement items not affocting cash Changes in curront assets and current liabilites Cash fows trom invosting activites Cash flows from friancing activies: Net increase (docrease) in cash Cash balance at December a1, prior year