Required information Use the following information for the Problems 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 Compar ative Balance Sheets December 31, 2017 and 2016 2017 2016 Assets $67, 900 83, 890 293, 656 1, 330 446, 776 145, 500 (42, 625) $ 549, 651 $ 85, 500 62, 625 263, 800 2, 135 414, 060 120, 000 (52, 000) $482, 060 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 1iabilities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained eamings Total liabilities and equity $65, 141 13, 600 78, 741 59, 000 137, 741 $132, 675 8, 400 141, 075 60, 750 201, 825 186, 750 49, 500 175, 660 $ 549, 651 162, 250 117, 985 $482, 060 FORTEN COMP ANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses $642, 500 297, 000 345, 500 $32, 750 144, 400 Depreciation expense 77, 150 Other expenses Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income (17, 125) 151, 225 41, 050 $110, 175 Additional Information on Year 2017 Transactions a. The loss on the cash sale of equipment was $17125 (details in b) b. Sold equipment costing $82,875, with accumulated depreciation of $42,125, for $23,625 cash c. Purchased equipment costing $108,375 by paying $54,000 cash and signing a long-term note payable for the balance d. Borrowed $5,200 cash by signing a short-term note payable e. Paid $56,125 cash to reduce the long-term notes payable f. Issued 3,700 shares of common stock for $20 cash per share g. Declared and paid cash dividends of $52,500