please help with the red, incorrect answers
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 $ 75, 400 91,440 301,156 1,380 469,376 140,500 (45,125) $564,751 $ 90,500 67,625 268, 800 2,235 429,160 125,000 (54,500) $499,660 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 liabilities 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 $ 70, 141 15,100 85,241 56,500 141,741 $140, 175 9,400 149,575 65,750 215, 325 188, 250 63,000 171,760 $564,751 167,250 0 117,085 $ 499,660 $667,500 302,000 365,500 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 37,750 Other expenses 149,400 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 187,150 (22, 125) 156, 225 48,050 $108,175 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $22,125 (details in b). b. Sold equipment costing $97,875, with accumulated depreciation of $47,125, for $28,625 cash. c. Purchased equipment costing $113,375 by paying $64,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,700 cash by signing a short-term note payable. e. Paid $58,625 cash to reduce the long-term notes payable. f. Issued 4,200 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $53,500. FORTEN COMPANY Spreadsheet for Statement of Cash Flows For Current Year Ended December 31 Analysis of Changes December 31, Prior Year Debit Credit December 31, Current Year Balance sheetdebit Cash $ $ $ Accounts receivable 90,500 67,625 268,800 15,100 23,815 32,356 Inventory Prepaid expenses Equipment 75,400 91,440 301,156 1,380 140,500 609,876 855 2,235 125,000 554,160 15,500 $ Balance sheet-credit $ 9,375 X 54,500 140,175 9,400 70,034 5,700 Accumulated depreciation-Equipment Accounts payable Short-term notes payable Long-term notes payable Common stock, $5 par value Paid-in capital in excess of par value, common stock Retained earnings 65,750 9,250 X 45,125 70,141 15,100 56,500 188,250 63,000 171,760 609,876 167,250 0 21,000 63,000 54,675 117,085 554,160 $ $
