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 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, 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) Loss on sale of equipment $ 582,500 285,000 297,500 $ 132,400 20,750 153,150 (5,125) Income before taxes Income taxes expense Net income FORTEN COMPANY Comparative Balance Sheets December 31 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable 139,225 24,250 $114,975 Current Year Prior Year $ 49,800 65,810 275,656 $ 73,500 58,625 251,800 1,250 1,875 392,516 377,800 157,500 (36,625) $513,391 $ 53,141 108,000 (46,000) $ 439,800 $ 114,675 Long-term notes payable: Total liabilities Equity Common stock, $5 par value Retained earnings Paid-in capital in excess of par, common stock Total liabilities and equity Additional Information on Current Year Transactions e. The loss on the cash sale of equipment was $5,125 (detalls in b) 75,000 128,141 $4,750 169,425 162,750 150,250 37,500 185,000 120,125 $513,391 $ 439,800 b. Sold equipment costing $46,875, with accumulated depreciation of $30.125, for $11.625 cash. c. Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term notes payable for the balance d. Paid $46,125 cash to reduce the long-term notes payable. e. Issued 2,500 shares of common stock for $20 cash per share f. Declared and paid cash dividends of $50,100 Answer is not complete. ESTER COMMMY Spatatet fr statimet of Canter For Curioul The Ended Doceber st December 31 Prior Your Balance sheet-debit Cash Accounts receivable Inventory Prepaid expenses Equipment Balance sheel-credit Accumulated depreciation-Equipment Accounts payable Anaryals of Chenges Credit December 31 Current Yar $ 73,500 (23,700) 49.800 50,825 S 15,185 66,810 251,800 23,856 275,656 1,875 $ 625 1,250 108,000 96,375 46,875 157,500 S 485,800 S 550,016 S 46,000 30.125 20,750 $ 36,625 114,675 61,534 53,141 Long-term notes payable 54,750 46,125 66,375 75,000 Common stock, $5 par value 150,250 12,500 162,750 Paid-in capital in excess of par value, common stock 0 37,500 37,500 Retained eamings 120,125 50,100 114,975 185,000 IS 485,800 S 550,018 Statement of cash flows Operating activities 0000000 00 Net income Depreciation expense Loss on sale of equipment Increase in accounts receivable Increase in inventory Decrease in prepaid expenses Decrease in accounts payable Investing activities Receipt from sale of equipment Payment to purchase equipment Financing activities Payment of cash dividends Payment on long term notes Issued common stock for cash Non cash investing and financing activities Purchase of equipment financed by long term notes payable 000 114,975 20,750 5,125 15,165 23.856 625 61,534 11.625 30,000 50.100 46,125 50.000 (46.225) 480,175 502,700