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 2017 2016 AssetS Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets $ 58,900 79,500 56,625 257,800 2,015 395,940 114,000 (39,625) (49,00e 531,531 460,940 74,830 284,656 1,270 419,656 151,500 Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities 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 $ 59,141 123,675 11,800200 130,875 54,750 185,625 70,941 62,000 132,941 174,75% 43,500 180,340 156, 2560 119,065 $ 531,531 460,940 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses $ 612,500 291,000 321,500 $ 26,750 138,400 Depreciation expense Other expenses Other gains (losses) 165,150 Loss on sale of equipment Income before taxes Income taxes expense Net income 11,125 145,225 32,650 $112,575