29 Required information 3.33 points 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. eBook References $657,500 300,000 357,500 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) $147, 400 Depreciation expense 35, 750 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 183,150 (20,125) 154, 225 45, 250 $ 108,975 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year Assets Cash $ 72,400 $ 88,500 CEE 29 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year 3.33 points $ 72,400 88, 420 298,156 1,360 460,336 142,500 (44, 125) $558,711 $ 88,500 65,625 266,800 2,195 423, 120 123,000 (53,500) $ 492,620 eBook References Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term notes payable Total liabilities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 68,141 14,500 82,641 57,500 140, 141 $ 137,175 9,000 146, 175 63,750 209,925 185,250 60,000 173,320 $558,711 165, 250 0 0 117,445 $492,620 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $20,125 (details in b). b. Sold equipment costing $91,875, with accumulated depreciation of $45,125, for $26,625 cash. c. Purchased equipment costing $111,375 by paying $60,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,500 cash by signing a short-term note payable. e Paid $57625 rash to reduce the lona-term notes navahle 29 Required information 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.) 3.33 points eBook References FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Net income $ 108.975 Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Changes in current assets and current liabilities Increase in accounts receivable Decrease in prepaid expenses Increase in inventory Decrease in accounts payable Net cash provided by operating activities Cash flows from investing activities och naid for nainment $ 108,975 29 Required information 3.33 points Increase in accounts receivable Decrease in prepaid expenses Increase in inventory Decrease in accounts payable Net cash provided by operating activities Cash flows from investing activities Cash paid for equipment Cash received from sale of equipment $ 108,975 eBook References 0 Net cash used in investing activities Cash flows from financing activities: Cash borrowed on short-term note Cash paid on long-term note Cash received from issuing stock Cash paid for dividends 0 108,975 $ Net cash used in financing activities Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $ 108,975