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) $ 150,400 $ 672,500 303,000 369,500 Depreciation expense Other gains (losses) Loss on sale of equipment Income before taxes 38,750 189,150 (23,125) Income taxes expense Net income Assets Cash Accounts receivable Inventory Prepaid expenses FORTEN COMPANY 157,225 49,450 $ 107,775 Comparative Balance Sheets December 31 Current Year Prior Year $ 76,900 92,950 $ 91,500 68,625 269,800 302,656 1,390 2,255 432,180 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 473,896 139,500 (45,625) $ 567,771 $ 71,141 71,400 142,541 189,750 64,500 170,980 $ 567,771 126,000 (55,000) $ 503,180 $ 141,675 76,350 218,025 168,250 8 116,905 $ 503,180