Required information Use the following information for the Problems below. (Algo) [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 Cost of goods sold Gross profit Operating expenses (excluding depreciation) $144,400 Depreciation expense Other gains (losses) $ 642,500 297,000 345,500 32,750 177,150 Loss on sale of equipment Income before taxes (17,125) 151,225 Income taxes expense Net income 41,050 $ 110,175 Assets Cash FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 67,900 83,890 $ 85,500 62,625 263,800 Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable 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 Additional Information on Current Year Transactions 293,656 1,330 2,135 446,776 414,060 145,500 120,000 (42,625) (52,000) $ 549,651 $ 482,060 $ 65,141 $ 132,675 72,600 137,741 180,750 55,500 175,660 $ 549,651 a. The loss on the cash sale of equipment was $17,125 (details in b). 69,150 201,825 162,250 0 117,985 $ 482,060 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 notes payable for the balance. d. Paid $50,925 cash to reduce the long-term notes payable. e. Issued 3,700 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $52,500.