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) $ 138,400 Depreciation expense Other gains (losses) $ 612,500 291,000 321,500 26,750 165,150 Loss on sale of equipment (11,125) Income before taxes Income taxes expense Net income 145,225 32,650 $112,575