Sales $ 582 , 506 Cost of goods sold 285,000 Gross profit 297, 500 Operating expenses (excluding depreciation) $ 132, 400 Depreciation expense 20, 750 153, 150 Other gains (losses) Loss on sale of equipment (5,125) Income before taxes 139, 225 Income taxes expense 24, 250 Net income $ 114,975 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year Assets Cash $ 49, 800 $ 73, 500 Accounts receivable 65, 810 50, 625 Inventory 275, 656 251, 800 Prepaid expenses 1, 250 1, 875 Total current assets 392, 516 377, 800 Equipment 157 , 500 108, 000 Accumulated depreciation-Equipment (36, 625) 46, 000 ) Total assets $ 513, 391 $ 439, 800 Liabilities and Equity Accounts payable $ 53, 141 $ 114, 675 Long-term notes payable 75, 000 54, 750 Total liabilities 128, 141 169, 425 Equity Common stock, $5 par value 162, 750 150, 250 Paid-in capital in excess of par, common stock 37,500 Retained earnings 185, 000 120, 125 Total liabilities and equity $ 513, $ 439, 800 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $5,125 (details in b). b. Sold equipment costing $46,875, with accumulated depreciation of $30,125, for $11,625 cash. c. Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term notes payable for the balance. d. Paid $46,125 cash to reduce the long-term notes payable. e. Issued 2,500 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $50.100. Prev 1 of 1 Next