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 Prior Year Current Year $ 70,900 86,910 296,656 1,350 455,816 143,500 (43,625) $555, 691 $ 87,500 64,625 265, 800 2,175 420, 100 122,000 (53,000) $489, 100 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 $ 67,141 14,200 81,341 58,000 139,341 $135,675 8,800 144,475 62,750 207,225 164, 250 183,750 58,500 174, 100 $555, 691 117,625 $489, 100 FORTEN COMPANY Income Statement For Current Year Ended December 31 Check my work $652,500 299,000 353,500 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 34,750 Other expenses 146,400 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 181,150 (19,125) 153, 225 43,850 $109,375 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $19,125 (details in b). b. Sold equipment costing $88,875, with accumulated depreciation of $44,125, for $25,625 cash. c. Purchased equipment costing $110,375 by paying $58,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,400 cash by signing a short-term note payable. e. Paid $57,125 cash to reduce the long-term notes payable. f. Issued 3,900 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $52,900. 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: Cash flows from investing activities Cash flows from financing activities: 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