Required information Use the following information for the Problems below. [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 Assets Cash Current Year Prior Year $ 57,400 73,320 $ 78,500 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 liabilities 283,156 55,625 256,800 1,260 1,995 415,136 392,920 152,500 113,000 (39,125) (48,500) $528,511 $457,420 $ 58,141 $122,175 11,500 7,000 69,641 129,175 62,500 53,750 132,141 182,925 Equity Common stock, $5 par value 170,250 155,250 Paid-in capital in excess of par, common stock 45,000 0 Retained earnings 181,120 119,245 Total liabilities and equity $528,511 $457,420 FORTEN COMPANY Income Statement