15 1 points eBook Required information Use the following information for the Problems below. (Algo) [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 Print Sales References Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 662,500 301,000 361,500 $ 148,400 36,750 185, 150 (21,125) 155,225 46,650 $ 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 depreciation-Equipment (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 Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity 186,750 166,250 61,500 0 172,540 117,265 $ 561,731 $ 496,140 15 1 points eBook Print COMMON SLUCK Retained earnings Total liabilities and equity Additional Information on Current Year Transactions 172,540 117,265 $ 61,731 561,731 496,140 a. The loss on the cash sale of equipment was $21,125 (details in b). b. Sold equipment costing $94,875, with accumulated depreciation of $46,125, for $27,625 cash. c. Purchased equipment costing $112,375 by paying $62,000 cash and signing a long-term notes payable for the balance. d. Paid $52,525 cash to reduce the long-term notes payable. e. Issued 4,100 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $53,300. References Problem 12-3A (Algo) Indirect: Statement of cash flows LO A1, P2, P3 Required: 1. Prepare a complete statement of cash flows using the indirect method for the current year. (Amounts to be deducted should be indicated with a minus sign.) FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Depreciation expense Loss on disposal of equipment Changes in current assets and current liabilities Increase in accounts receivable Increase in inventory Decrease in prepaid expenses Decrease in accounts payable Cash flows from investing activities Cash paid for equipment Cash received from sale of equipment Cash flows from financing activities: Cash paid on long-term notes Cash received from issuing stock Cash paid for dividends. Net increase (decrease) in cash $ 108,575 36,750 21.125 $ 166,450 0 0 $ 166,450 Cash balance at December 31, prior year Cash balance at December 31, current year $ 166,450