Refer to Forten Companys financial statements and related information in Problem 16-1A. In Problem 16-1A. Forten Company,

Refer to Forten Company’s financial statements and related information in Problem 16-1A.

In Problem 16-1A. Forten Company, a merchandiser, recently completed its calendar- year 2013 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 balance sheets and income statement follow.

Required
Prepare a complete statement of cash flows; report its operating activities according to the direct method. Disclose any noncash investing and financing activities in anote.

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FORTEN COMPANY Comparative Balance Sheets December 31,2013 and 2012 2013 2012 Assets Cash..49.800 73,500 Accounts receivable 65,810 Merchandise inventory275,656 251800 Prepaid expenses 50,625 FORTEN COMPANY Income Statement For Year Ended December 31, 2013 1.250 1,875 Sales Cost of goods sold. Gross profit.. Operating expenses $582,500 285,000 297,500 Accum. depreciation -Equipment.36.625) (46,000 Total assets .. $513.391 439.800 Liabilities and Equity $114.675 53.141 Short-term notes payable ...10,000 ..65,000 Ac counts payable Depreciation expense.20,750 6,000 48,750 Long-term notes payable Common stock, $5 par value..162,750 150,250 Paid-in capital in excess Other gains (losses) Loss on sale of equipment. Income before taxes. ncome taxes expense. Net income (5,125) 39.225 24,250 $114,975 of par, common stock ..37,500 185.000 Retained earnings. ..*.... 1 Total liabilities and equity...$513,391 $439,800 120.125