Assets
Cash	$	57,400			$	78,500
Accounts receivable		73,320				55,625
Inventory		283,156				256,800
Prepaid expenses		1,260				1,995
Total current assets		415,136				392,920
Equipment		152,500				113,000
Accum. depreciationEquipment		(39,125	)			(48,500	)
Total assets	$	528,511			$	457,420
Liabilities and Equity
Accounts payable	$	58,141			$	122,175
Short-term notes payable		11,500				7,000
Total current liabilities		69,641				129,175
Long-term notes payable		62,500				53,750
Total liabilities		132,141				182,925
Equity
Common stock, $5 par value		172,750				155,250
Paid-in capital in excess of par, common stock		42,500				0
Retained earnings		181,120				119,245
Total liabilities and equity	$	528,511			$	457,420

FORTEN COMPANY Income Statement For Year Ended December 31, 2017
Sales				$	607,500
Cost of goods sold					290,000
Gross profit					317,500
Operating expenses
Depreciation expense	$	25,750
Other expenses		137,400			163,150
Other gains (losses)
Loss on sale of equipment					(10,125	)
Income before taxes					144,225
Income taxes expense					31,250
Net income				$	112,975

Additional Information on Year 2017 Transactions

1. The loss on the cash sale of equipment was $10,125 (details in b).
2. Sold equipment costing $61,875, with accumulated depreciation of $35,125, for $16,625 cash.
3. Purchased equipment costing $101,375 by paying $40,000 cash and signing a long-term note payable for the balance.
4. Borrowed $4,500 cash by signing a short-term note payable.
5. Paid $52,625 cash to reduce the long-term notes payable.
6. Issued 3,000 shares of common stock for $20 cash per share.
7. Declared and paid cash dividends of $51,100.

Required:
1. Prepare a complete statement of cash flows; report its operating activities using the indirect method.