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, (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.

FORTEN COMPANY Comparative Balance Sheets December 31
	Current Year						Prior Year
Assets
Cash		$	70,900					$	87,500
Accounts receivable			86,910						64,625
Inventory			296,656						265,800
Prepaid expenses			1,350						2,175
Total current assets			455,816						420,100
Equipment			143,500						122,000
Accum. depreciationEquipment			(43,625	)					(53,000	)
Total assets		$	555,691					$	489,100
Liabilities and Equity
Accounts payable		$	67,141					$	135,675
Short-term notes payable			14,200						8,800
Total current liabilities			81,341						144,475
Long-term notes payable			58,000						62,750
Total liabilities			139,341						207,225
Equity
Common stock, $5 par value			183,750						164,250
Paid-in capital in excess of par, common stock			58,500						0
Retained earnings			174,100						117,625
Total liabilities and equity		$	555,691					$	489,100

FORTEN COMPANY Income Statement For Current Year Ended December 31
Sales				$	652,500
Cost of goods sold					299,000
Gross profit					353,500
Operating expenses
Depreciation expense	$	34,750
Other expenses		146,400			181,150
Other gains (losses)
Loss on sale of equipment					(19,125	)
Income before taxes					153,225
Income taxes expense					43,850
Net income				$	109,375

Additional Information on Current Year Transactions

1. The loss on the cash sale of equipment was $19,125 (details in b).
2. Sold equipment costing $88,875, with accumulated depreciation of $44,125, for $25,625 cash.
3. Purchased equipment costing $110,375 by paying $58,000 cash and signing a long-term note payable for the balance.
4. Borrowed $5,400 cash by signing a short-term note payable.
5. Paid $57,125 cash to reduce the long-term notes payable.
6. Issued 3,900 shares of common stock for $20 cash per share.
7. Declared and paid cash dividends of $52,900

FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operations: 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