17 Forten Company, a merchandiser, recently completed its calendar-year 2017 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 income statement and balance sheets follow. 10 points 2016 8 02:13:35 1,400 FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 Assets Cash $ 78,400 Accounts receivable 94,460 Inventory 304, 156 Prepaid expenses Total current assets 478,416 Equipment 138,500 Accum. depreciation-Equipment (46,125) Total assets $570,791 Liabilities and Equity Accounts payable $ 72,141 Short-term notes payable 15,700 Total current liabilities 87,841 Long-term notes payable 55,500 Total liabilities 143, 341 Equity Common stock, $5 par value 200,750 Paid-in capital in excess of par, 56,500 common stock Retained earnings 170,200 Total liabilities and equity $570, 791 $ 92,500 69,625 270,800 2.275 435,200 127,000 (55,500) $506,700 $143, 175 9,800 152,975 67, 750 220,725 169, 250 116,725 $506, 700 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales $677,500 Cost of goods sold 304,000 Gross profit 373,500 Operating expenses Depreciation expense$ 39, 750 Other expenses 151,400 191, 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 Additional Information on Year 2017 Transactions a. The loss on the cash sale of equipment was $24,125 (details in b). b. Sold equipment costing $103,875, with accumulated depreciation of $49,125, for $30,625 cash. c. Purchased equipment costing $115,375 by paying $68,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,900 cash by signing a short-term note payable. e. Paid $59,625 cash to reduce the long-term notes payable. f. Issued 4,400 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $53,900. Required: 1. Prepare a complete statement of cash flows; report its operating activities using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) FORTEN COMPANY Statement of Cash Flows For Year Ended December 31, 2017 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operations: $ 0 Cash flows from investing activities 0 Cash flows from financing activities: 0 0 $ Net increase (decrease) in cash Cash balance at beginning of year Cash balance at end of year $ 0