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) $ 142,400 Depreciation expense Other gaina (lossen) $ 632,500 295,000 337,500 30,750 173,150 Loss on sale of equipment Income before taxes (15,125) Income taxes expense Net income 149,225 38,250 $ 110,975 Assets Cash Accounts receivable Inventory Prepaid expenses FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $64,900 80,970 290,656 1,310 $ 83,500 60,625 261,800 2,095