Use the following information for the Problems below. $($Algo$)$Skip to question$[$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 COMPANYIncome StatementFor Current Year Ended December $31$Sales $ $662,500$Cost of goods sold $301,000$Gross profit $361,500$Operating expenses $($excluding depreciation$)$$ $148,400$ Depreciation expense$36,750185,150$Other gains $($losses$)$ Loss on sale of equipment $(21,125)$Income before taxes $155,225$Income taxes expense $46,650$Net income $ $108,575$FORTEN COMPANYComparative Balance SheetsDecember $31$ Current YearPrior YearAssets Cash$ $73,900$$ $89,500$Accounts receivable$89,93066,625$Inventory$299,656267,800$Prepaid expenses$1,3702,215$Total current assets$464,856426,140$Equipment$141,500124,000$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$71,80073,950$Total liabilities$140,941212,625$Equity Common stock, $$5$ par value$186,750166,250$Paid$-$in capital in excess of par, common stock$61,5000$Retained earnings$172,540117,265$Total liabilities and equity$ $561,731$$ $496,140$Additional Information on Current Year TransactionsThe loss on the cash sale of equipment was $$21,125($details in b$).$Sold equipment costing $$94,875,$ with accumulated depreciation of $$46,125,$ for $$27,625$ cash.Purchased equipment costing $$112,375$ by paying $$62,000$ cash and signing a long$-$term notes payable for the balance.Paid $$52,525$ cash to reduce the long$-$term notes payable.Issued $4,100$ shares of common stock for $$20$ cash per share.Declared and paid cash dividends of $$53,300.$