Required information [The following information applies to the questions displayed below.] Forten 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 company's income statement and balance sheets follow FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets $ 61,900 81,500 58,625 259,800 2,055 401,980 116,000 77,850 287,656 1,290 428,696 149,500 (40, 625) (50,000) $537,571 $467,980 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 1iabilities and equity $ 61,141 $126,675 12,4007,600 134,275 56,750 191,025 73,541 61,000 134,541 178,750 45,500 178,780 158,250 118,705 $537,571 $467,980 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses $622,500 293,000 329,500 Depreciation expense Other expenses $ 28,750 140,400 169,150 Other gains (losses) Loss on sale of equipment (13,125) Income before taxes Income taxes expense Net income 147,225 35,450 $111,775