! Required information [The following information applies to the questions displayed below.] Forten Company's current year income statement, comparative balance sheets, and additional information follow. For 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 For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) $ 662,500 301,000 361,500 $ 148,400 36,750 185,150 Loss on sale of equipment Income before taxes (21,125) Income taxes expense Net income FORTEN COMPANY 155,225 46,650 $ 108,575 Comparative Balance Sheets December 31 Current Year Prior Year $ 73,900 89,930 $ 89,500 66,625 267,800 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 299,656 1,370 2,215 464,856 426,140 141,500 124,000 (44,625) $ 561,731 (54,000) $ 496,140 $ 69,141 $ 138,675 71,800 73,950 140,941 212,625 186,750 166,250 61,500 172,540 117,265 $ 561,731 $ 496.140