[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) $ 582,500 285,000 297,500 $ 132,400 20,750 153,150 Loss on sale of equipment Income before taxes Income taxes expense Net income: (5,125) 139,225 24,250 $114,975 Assets Cash Accounts receivable Inventory Prepaid expenses FORTEN COMPANY Comparative Balance Sheets December 311 Current Year Prior Year $ 49,800 65,810 $ 73,500 50,625 251,800 1,875 275,656 1,250 392,516) 377,800 157,500 108,000 (36,625) (46,000) $ 513,391 $439,800 Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity. Accounts payable Long-term notes payable $ 53,141 75,000 $114,675 54,750