Required information [The following information applies to the questions displayed below.] Forten Company, a merchandiser, recently completed its calendar-year 2017 operations. 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. The company's income statement and balance sheets follow. FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 Assets Cash 2017 2016 $ 66,400 $ 84,500 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 82,380 292,156 1,320 61,625 262,800 2,115 442,256 411,040 146,500 119,000 (42,125) (51,500) $546,631 $478,540 $ 64,141 $131,175 13,300 8,200 77,441 139,375 59,500 59,750 136,941 199,125 Equity Common stock, $5 par value 184,750 161,250 Paid-in capital in excess of par, common stock 48,500 0 Retained earnings 176,440 118,165 Total liabilities and equity $546,631 $478,540 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income $637,500 296,000 341,500 $ 31,750 143,400 175,150 (16,125) 150,225 39,650 $110,575 Additional Information on Year 2017 Transactions a. The loss on the cash sale of equipment was $16,125 (details in b). b. Sold equipment costing $79,875, with accumulated depreciation of $41,125, for $22,625 cash. c. Purchased equipment costing $107,375 by paying $52,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,100 cash by signing a short-term note payable. e. Paid $55,625 cash to reduce the long-term notes payable. f. Issued 3,600 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $52,300. For Year Ended December 31, 2017 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: Net increase (decrease) in cash Cash balance at beginning of year Cash balance at end of year 0 0 $ 0 $ 0