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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 $ $677,500$

Cost of goods sold $304,000$

Gross profit $373,500$

Operating expenses $($excluding depreciation$)$ $ $151,400$

Depreciation expense $39,750191,150$

Other gains $($losses$)$

Loss on sale of equipment $(24,125)$

Income before taxes $158,225$

Income taxes expense $50,850$

Net income $ $107,375$

FORTEN COMPANY

Comparative Balance Sheets

December $31$

Current Year Prior Year

Assets

Cash $ $78,400$ $ $92,500$

Accounts receivable $94,46069,625$

Inventory $304,156270,800$

Prepaid expenses $1,4002,275$

Total current assets $478,416435,200$

Equipment $138,500127,000$

Accumulated depreciation$$Equipment $(46,125)(55,500)$

Total assets $ $570,791$ $ $506,700$

Liabilities and Equity

Accounts payable $ $72,141$ $ $143,175$

Long$-$term notes payable $71,20077,550$

Total liabilities $143,341220,725$

Equity

Common stock, $$5$ par value $191,250169,250$

Paid$-$in capital in excess of par, common stock $66,0000$

Retained earnings $170,200116,725$

Total liabilities and equity $ $570,791$ $ $506,700$

Additional Information on Current Year Transactions

The loss on the cash sale of equipment was $$24,125($details in b$).$

Sold equipment costing $$103,875,$ with accumulated depreciation of $$49,125,$ for $$30,625$ cash.

Purchased equipment costing $$115,375$ by paying $$68,000$ cash and signing a long$-$term notes payable for the balance.

Paid $$53,725$ cash to reduce the long$-$term notes payable.

Issued $4,400$ shares of common stock for $$20$ cash per share.

Declared and paid cash dividends of $$53,900.$

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