Use the following information for the Problems below. (Algo) [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) $ 150,400 Depreciation expense Other gains (losses) $ 672,500 303,000 369,500 38,750 189,150 Loss on sale of equipment Income before taxes. (23,125) Income taxes expense Net income 157,225 49,450 $ 107,775 Assets Cash Accounts receivable. Prepaid expenses Inventory Total current assets Equipment FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 76,900 92,950 302,656 $ 91,500 68,625 269,800 Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable 1,390 2,255 432,180 473,896 139,500 (45,625) $ 567,771 $ 71,141 71,400 126,000 (55,000) $ 503,180 $ 11,675 76,350