Addltional Information on Year 2017 Transactions a The loss on the cash sale of equipment was $25,125 (detals In b. b. Sold equipment costing $106,875, with accumulated depreclation of $50,125, for $31,625 cash. c Purchased equlpment costing $116,375 by paying $70,000 cash and slgning a long-term note payable for the balance. d. Borrowed $6,000 cash by signing a short-term note payable. e. Paid $60,125 cash to reduce the long-term notes payable. f. Issued 4,500 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $54,100 Required: 1. Prepare a complete statement of cash flows, report its operating activities using the indirect method (Amounts to be deducted should be Indiceted with a minus sign.) FORTEN COMPANY Statement of Cash Flows For Year Ended December 31, 2017 Cash fows from operating activities Adjustments to reconoile net income to net cash provided by operations Cash fows from invessng astivites Required Information The following information applies to the questions displayed below] Forten Company, a merchandiser, recently completed Its calendar-year 2017 operations. For the year, (1) all sales are credt 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 pald in advance and are Initially debited to Prepald Expenses. The company's Income statement and balance sheets follow FORTEN COMPANY Comparative Balance Sheets December 31, 2817 and 2016 2017 2816 Assets S 79,9ee 95,97e 305,656 Cash $ 93,58e Accounts receivable 78,625 271,8ee 2,295 438, 220 128, eee (56,eee) Inventory Prepaid expenses 1,410 Total current assets Equipment Accum. depreciation-Equipment 482,936 137,50e (46,625) Total assets 573,811 $ 51e,220 Liabilities and Equity Accounts payable Short-term notes payable $ 73,141 $ 144,675 16,eee 10,e00 Total current liabilities 89,141 154,675 Long-term notes payable Total liabilities 55,0ee 68,750 144,141 223,425 Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings 282,75e 57,580 170, 25e 169,420 116,545 Total liabilities and equity $ 573,811 $ 518,220 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales $ 682,5ee Cost of goods sold Gross profit Operating expenses Depreciation expense 3es,eee 377,5ee $ 4e,75e Other expenses 152,400 193,150 Other gains (losses) Loss on sale of equipment Income before taxes (25,125) 159,225 $2,25e Income taxes expenser Net income $ 106,975 Additionel Informetion on Year 2017 Trensactions a The loss on the cash sale of equipment was $25.125 (detalls in b b. Sold equipment costing $106,875, with accumulated depreciation of $50,125, for $31,625 cash. c. Purchased equipment costing $116,375 by paying $70,000 cash and signing a long-term note payable for the balance d. Borrowed $6,000 cash by signing a short-term note payable e. Pald $60,125 cash to reduce the long-term notes payable f. Issued 4,500 shares of common stock for $20 cash per share g Declared and pald cash dividends of $54,100. 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 Cash flows from investing activities Cash flows from financing activities Net incresse (decrease) in cash C Cash balance at beginning of year Cash balance at end of year
