orten Company, a merchandiser, recently completed its calendar-year 2017 operations. 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. The companys income statement and balance sheets follow.

FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016
	2017				2016
Assets
Cash	$	57,400			$	78,500
Accounts receivable		73,320				55,625
Inventory		283,156				256,800
Prepaid expenses		1,260				1,995
Total current assets		415,136				392,920
Equipment		152,500				113,000
Accum. depreciationEquipment		(39,125	)			(48,500	)
Total assets	$	528,511			$	457,420
Liabilities and Equity
Accounts payable	$	58,141			$	122,175
Short-term notes payable		11,500				7,000
Total current liabilities		69,641				129,175
Long-term notes payable		62,500				53,750
Total liabilities		132,141				182,925
Equity
Common stock, $5 par value		172,750				155,250
Paid-in capital in excess of par, common stock		42,500				0
Retained earnings		181,120				119,245
Total liabilities and equity	$	528,511			$	457,420

FORTEN COMPANY Income Statement For Year Ended December 31, 2017
Sales				$	607,500
Cost of goods sold					290,000
Gross profit					317,500
Operating expenses
Depreciation expense	$	25,750
Other expenses		137,400			163,150
Other gains (losses)
Loss on sale of equipment					(10,125	)
Income before taxes					144,225
Income taxes expense					31,250
Net income				$	112,975

FORTEN COMPANY
Statement of Cash Flows
For Year Ended December 31, 2017
Cash flows from operating activities
Net income	$112,975
Adjustments to reconcile net income to net cash provided by operations:
Depreciation expense
Loss on disposal of equipment
Accounts receivable increase
Inventory increase
Prepaid expense decrease
Cash borrowed on short-term note
Net cash provided by investing activities		$112,975
Cash flows from investing activities
Cash paid for equipment
		0
Cash flows from financing activities:
		0
Net increase (decrease) in cash		$112,975
Cash balance at beginning of year
Cash balance at end of year		$112,975

The loss on the cash sale of equipment was $10,125 (details in b).

Sold equipment costing $61,875, with accumulated depreciation of $35,125, for $16,625 cash.

Purchased equipment costing $101,375 by paying $40,000 cash and signing a long-term note payable for the balance.

Borrowed $4,500 cash by signing a short-term note payable.

Paid $52,625 cash to reduce the long-term notes payable.

Issued 3,000 shares of common stock for $20 cash per share.

Declared and paid cash dividends of $51,100