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, (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 Assets Cashi 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 Current Year Prior Year $ 55,900 71,810 281,656 $ 77,500 54,625 255,800 1,250 1,975 410,616 389,900 153,500 112,000 (38,625) (48,000) $525,491 $453,900 $ 57,141 $120,675 11,200 6,800 68, 341 63,000 127,475 52,750 131, 341 180,225 168,750 154,250 43,500 0 181,900 119, 425 Retained earnings Total liabilities and equity FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Other gains (losses) Loss on sale of equipment Income before taxes $602,500 289,000 313,500 $24,750 136, 400 161, 150 (9,125) 143, 225 43,500 181,900 $525,491 9 119,425 $453,900 Income taxes expense Net income Additional Information on Current Year Transactions 29,850 $113,375 a. The loss on the cash sale of equipment was $9,125 (details in b). b. Sold equipment costing $58,875, with accumulated depreciation of $34,125, for $15,625 cash. c. Purchased equipment costing $100,375 by paying $38,000 cash and signing a long-term note payable for the balance. d. Borrowed $4,400 cash by signing a short-term note payable. e. Paid $52,125 cash to reduce the long-term notes payable. f. Issued 2,900 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $50,900. FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operations: $ 0 Cash flows from investing activities Cash flows from financing activities: 0 $ Cash flows from investing activities + Cash flows from financing activities: Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $ 0