Sales Cost of goods sold Gross profit FORTEN COMPANY Income Statement For Current Year Ended December 31 $ 612,500 291,000 321,500 26,750 165,150 (11,125) Operating expenses (excluding depreciation) $ 138,400 Depreciation expense Other gains (losses). Loss on sale of equipment Income before taxes Income taxes expense Net income 145,225 32,650 $ 112,575 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 58,900 74,830 284,656 $ 79,500 56,625 257,800 Assets Cash 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 1,270 2,015 419,656 151,500 (39,625) $ 531,531 $ 59,141 73,800 132,941 171,750 395,940 114,000 (49,000) $ 460,940 $ 123,675 61,950 185,625 156,250 46,500 180,340 119,065 $ 531,531 $ 460,940 Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $11,125 (details in b). b. Sold equipment costing $64,875, with accumulated depreciation of $36,125, for $17,625 cash. c. Purchased equipment costing $102,375 by paying $42,000 cash and signing a long-term notes payable for the balance. d. Paid $48,525 cash to reduce the long-term notes payable. e. Issued 3,100 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $51,300.