[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 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 Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity Current Year $ 78,400 Prior Year $ 92,500 94,460 304,156 69,625 270,800 1,400 2,275 478,416 435,200 127,000 138,500 (46,125) $570,791 (55,500) $ 506,700 $143,175 $ 72,141 15,700 9,800 87,841 152,975 55,500 67,750 143,341 220,725 191,250 169,250 66,000 0 170,200 $570,791 116,725 $ 506,700 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $ 677,500 Cost of goods sold 304,000 Gross profit Operating expenses 373,500 Depreciation expense $ 39,750 Other expenses 151,400 191,150 Other gains (losses) Loss on sale of equipment (24,125) Income before taxes 158,225 Income taxes expense Net income 50,850 $107,375 Saved Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $24,125 (details in b). b. Sold equipment costing $103,875, with accumulated depreciation of $49,125, for $30,625 cash. c. Purchased equipment costing $115,375 by paying $68,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,900 cash by signing a short-term note payable. e. Paid $59,625 cash to reduce the long-term notes payable. f. Issued 4,400 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $53,900. FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operations: S 0 Cash flows from investing activities Cash flows from financing activities Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year 0 S 00 S 0