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[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		$ 662,500
Cost of goods sold		301,000
Gross profit		361,500
Operating expenses (excluding depreciation)	$ 148,400
Depreciation expense	36,750	185,150
Other gains (losses)
Loss on sale of equipment		(21,125)
Income before taxes		155,225
Income taxes expense		46,650
Net income		$ 108,575

FORTEN COMPANY
Comparative Balance Sheets
December 31
	Current Year	Prior Year
Assets
Cash	$ 73,900	$ 89,500
Accounts receivable	89,930	66,625
Inventory	299,656	267,800
Prepaid expenses	1,370	2,215
Total current assets	464,856	426,140
Equipment	141,500	124,000
Accumulated depreciationEquipment	(44,625)	(54,000)
Total assets	$ 561,731	$ 496,140
Liabilities and Equity
Accounts payable	$ 69,141	$ 138,675
Long-term notes payable	71,800	73,950
Total liabilities	140,941	212,625
Equity
Common stock, $5 par value	186,750	166,250
Paid-in capital in excess of par, common stock	61,500	0
Retained earnings	172,540	117,265
Total liabilities and equity	$ 561,731	$ 496,140

Additional Information on Current Year Transactions

1. The loss on the cash sale of equipment was $21,125 (details in b).
2. Sold equipment costing $94,875, with accumulated depreciation of $46,125, for $27,625 cash.
3. Purchased equipment costing $112,375 by paying $62,000 cash and signing a long-term notes payable for the balance.
4. Paid $52,525 cash to reduce the long-term notes payable.
5. Issued 4,100 shares of common stock for $20 cash per share.
6. Declared and paid cash dividends of $53,300.