Forten Company, a merchandiser, recently completed its calendar-year 2017 operations. 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. The company's income statement and balance sheets follow FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets 92,500 69,625 270,800 2, 275 435, 200 127,000 $ 78, 400 94,460 304,156 1,400 478,416 138,500 (46, 125) (55, 500) $570,791 $506,700 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 $ 72,141 $143,175 9,800 152,975 67,750 220,725 15,700 87,841 55,500 143,341 200, 750 56,500 170,200 169,250 116, 725 $570,791 506,700 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses $677,500 304,000 373,500 $ 39,750 Depreciation expense Other expenses 151,400 191,150 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income (24,125) 158,225 50,850 $107,375