Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accun. 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 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income $ 637,500 296,000 341,500 $ 31,750 143,400 175,150 (16,125) 150,225 39,650 $ 110,575 Current Year Prior Year 292,156 1,320 $ 66,400 82,380 $ 84,500 61,625 262,800 2,115 442,256 411,040 146,500 119,000 (42,125) (51,500) $ 546,631 $478,540 $ 64,141 $131,175 13,300 8,2001 77,441 139,375 59,500 59,750 136,941 199,125 179,250 161,250 54,000 e 176,440 $ 546,631 118,165 $ 478,540 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $16,125 (details in b). b. Sold equipment costing $79,875, with accumulated depreciation of $41.125, for $22,625 cash. c. Purchased equipment costing $107,375 by paying $52,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,100 cash by signing a short-term note payable. e. Paid $55,625 cash to reduce the long-term notes payable. Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $16,125 (details in b). b. Sold equipment costing $79,875, with accumulated depreciation of $41,125, for $22,625 cash. c. Purchased equipment costing $107,375 by paying $52,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,100 cash by signing a short-term note payable. e. Paid $55.625 cash to reduce the long-term notes payable. f. Issued 3,600 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $52,300. 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.) FORTEN COMPANY Statement of Cash Flows: For Current Year Ended December 311 Cash flows from operating activities Net income $ 110,575 Adjustments to reconcile net income to net cash provided by operations: Depreciation expense 93,625 Accounts receivable increase (20,755) Inventory increase (29,356) Accounts payable increase Net cash provided by operating activities Cash flows from investing activities 67,034 $ 221.123 Cash paid for equipment 52,000 Cash borrowed on short-term note 5,100 Cash paid on long-term notei 55,625 Net cash provided by investing activities 112,725 Cash flows from financing activities