7 Part 3 of 3 6.25 points Required information [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 Sales $ 667,500 eBook Cost of goods sold Gross profit 382,000 365,500 Operating expenses (excluding depreciation) $ 149,400 Depreciation expense Other gains (losses) 37,750 187,150 Loss on sale of equipment (22,125) Income before taxes References Income taxes expense 156,225 48,050 Net income $ 108,175 Assets Cash Accounts receivable Inventory Prepaid expenses FORTEN COMPANY Comparative Balance Sheets December 31 Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Current Year Prior Year $ 75,400 91,440 301,156 $ 90,500 67,625 268,800 1,380 2,235 459,376 429,169 140,500 (45,125) $ 564,751 125,000 (54,500) $ 499,660 Accounts payable 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 Additional Information on Current Year Transactions $ 70,141 $ 148,175 71,600 75,150 141,741 215,325 180,250 167,250 53,000 0 171,760 117,085 $564,751 $ 499,660 a. The loss on the cash sale of equipment was $22,125 (details in b). b. Sold equipment costing $97,875, with accumulated depreciation of $47,125, for $28,625 cash. c. Purchased equipment costing $113,375 by paying $64,000 cash and signing a long-term notes payable for the balance. d. Paid $52,925 cash to reduce the long-term notes payable. e. Issued 4,200 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $53,500. Required: Prepare a complete statement of cash flows using the direct method. (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 Cash flows from investing activities Cash flows from financing activities Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year