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[The following information applies to the questions displayed below.] 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
Assets
Cash		$	64,900					$	83,500
Accounts receivable			80,870						60,625
Inventory			290,656						261,800
Prepaid expenses			1,310						2,095
Total current assets			437,736						408,020
Equipment			147,500						118,000
Accum. depreciationEquipment			(41,625	)					(51,000	)
Total assets		$	543,611					$	475,020
Liabilities and Equity
Accounts payable		$	63,141					$	129,675
Short-term notes payable			13,000						8,000
Total current liabilities			76,141						137,675
Long-term notes payable			60,000						58,750
Total liabilities			136,141						196,425
Equity
Common stock, $5 par value			177,750						160,250
Paid-in capital in excess of par, common stock			52,500						0
Retained earnings			177,220						118,345
Total liabilities and equity		$	543,611					$	475,020

FORTEN COMPANY Income Statement For Current Year Ended December 31
Sales				$	632,500
Cost of goods sold					295,000
Gross profit					337,500
Operating expenses
Depreciation expense	$	30,750
Other expenses		142,400			173,150
Other gains (losses)
Loss on sale of equipment					(15,125	)
Income before taxes					149,225
Income taxes expense					38,250
Net income				$	110,975

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	$83,500			$64,900
Accounts receivable	60,625
Inventory	261,800
Prepaid expenses	2,095
Equipment	118,000
	$526,020
Balance sheetcredit
Accumulated depreciationEquipment	$51,000
Accounts payable	129,675
Short-term notes payable	8,000
Long-term notes payable	58,750
Common stock, $5 par value	160,250
Paid-in capital in excess of par value, common stock	0
Retained earnings	118,345
	$526,020
Statement of cash flows
Operating activities
Investing activities
Financing activities
Non cash investing and financing activities
Purchase of equipment financed by long-term note payable