Direct method

Forten Company, a merchandiser, recently completed its calendar-year 2018 operations. For the year, (T) 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. The company's income statement, balance sheets, and additional information follow. FORTEN COMPANY Comparative Balance Sheets December 31, 2018 and 2817 2018 2817 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 liabilties Long-term notes payable Total liabilities Equity Common stock, 55 par value Paid-in capital in excess of par, common stock Retained earnings Total 1labilities and equity s 78,400 92,580 69,625 278,880 94,460 304, 156 1,400 478,416 415 788 127,000 138,50 (46,125) (55,500) $570,791 506,780 s 72,141 143,175 15,7009,880 152,975 67.750 220,725 87,841 55,500 143, 341 200,750 178,750 107,225 s 570,791 $506,700 66,080 160,700