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 $ 677,500 Cost of goods sold 304,000 Gross profit Operating expenses (excluding depreciation) $ 151,400 Depreciation expense 373,500 39,750 191,150 Other gains (losses) Loss on sale of equipment Income before taxes: (24,125) Income taxes expense Net incone Assets Cash Accounts receivable Prepaid expenses Inventory Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable Total liabilities Equity 158,225 50,850 $107,375 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 78,400 94,460 304,156 1,400 478,416 138,500 (46,125) $570,791 $ 72,141 $ 92,500 69,625 270,000 2,275 435,200 127,000 (55,500) $ 506,700 $143,175 77,550 220,725 71,200 143,341 191,250 169,250 66,000 0 170,200 116,725 $570,791 $ 506,700 Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $24,125 (details in b). b. Sold equipment costing $103,875, with accumulated depreciation of $49,125, for $30,625 cash. c. Purchased equipment costing $115,375 by paying $68,000 cash and signing a long-term notes payable for the balance. d. Paid $53,725 cash to reduce the long-term notes payable. e. Issued 4,400 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $53,900. FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating 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 $ 0