[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) Depreciation expense Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income $582,500 285,000 297,500 $132,400 20,750 153,150 (5,125) 139,225 24,250 $114,975 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Short-term notes Davable FORTEN COMPANY Comparative Balance Sheets December 31 Current Year $ 49,800 65,810 275,656 1,250 Prior Year $ 73,500 50,625 251,800 1,875 377,800 108,000 392,516 157,500 (36,625) (46,000) $513,391 $439,800 $ 53,141 10,000 $114,675 6,000