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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, (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 COMPANYIncome StatementFor Current Year Ended December 31Sales$ 647,500Cost of goods sold298,000Gross profit349,500Operating expenses (excluding depreciation)$ 145,400Depreciation expense33,750179,150Other gains (losses)Loss on sale of equipment(18,125)Income before taxes152,225Income taxes expense42,450Net income$ 109,775FORTEN COMPANYComparative Balance SheetsDecember 31Current YearPrior YearAssetsCash$ 69,400$ 86,500Accounts receivable85,40063,625Inventory295,156264,800Prepaid expenses1,3402,155Total current assets451,296417,080Equipment144,500121,000Accumulated depreciationEquipment(43,125)(52,500)Total assets$ 552,671$ 485,580Liabilities and EquityAccounts payable$ 66,141$ 134,175Long-term notes payable72,40070,350Total liabilities138,541204,525EquityCommon stock, $5 par value182,250163,250Paid-in capital in excess of par, common stock57,0000Retained earnings174,880117,805Total liabilities and equity$ 552,671$ 485,580

Additional Information on Current Year Transactions

1. The loss on the cash sale of equipment was $18,125 (details in b).
2. Sold equipment costing $85,875, with accumulated depreciation of $43,125, for $24,625 cash.
3. Purchased equipment costing $109,375 by paying $56,000 cash and signing a long-term notes payable for the balance.
4. Paid $51,325 cash to reduce the long-term notes payable.
5. Issued 3,800 shares of common stock for $20 cash per share.
6. Declared and paid cash dividends of $52,700.