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[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		$ 652,500
Cost of goods sold		299,000
Gross profit		353,500
Operating expenses (excluding depreciation)	$ 146,400
Depreciation expense	34,750	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

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
Accumulated depreciationEquipment	(43,625)	(53,000)
Total assets	$ 555,691	$ 489,100
Liabilities and Equity
Accounts payable	$ 67,141	$ 135,675
Long-term notes payable	72,200	71,550
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

Additional Information on Current Year Transactions

The loss on the cash sale of equipment was $19,125 (details in b).

Sold equipment costing $88,875, with accumulated depreciation of $44,125, for $25,625 cash.

Purchased equipment costing $110,375 by paying $58,000 cash and signing a long-term notes payable for the balance.

Paid $51,725 cash to reduce the long-term notes payable.

Issued 3,900 shares of common stock for $20 cash per share.

Declared and paid cash dividends of $52,900.