B 1 U Abe X2 X A This portion of your examination requires your preparation of a Statement of Cash Flows. Please prepare your submission in a format of your choosing and, when complete, upload your work to Blackboard. Thank you for your attention to these instructions and let me know If you have questions, need additional Information, or wish to discuss this assignment further. Fortan 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, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year Assets Cash 49,800 $ 73,500 Accounts receivable 65,810 50,625 Inventory 275,656 251,800 Prepaid expenses 1250 1,875 Total current assets 392,516 377.800 Equipment 157,500 108.000 Accumulated depreciation Equipment (36,625) (46.000) Total assets $ 513,391 $439,800 Llabilities and Equity Accounts payable $ 53,141 $114,675 Short-term notes payable 10,000 6,000 Total current liabilities 83,141 120.675 Long-term notes payable 65.000 48,750 Total liabilities 128.141 169.425 Equity Common stock, $5 par value 162.750 150.250 Paid-in capital in excess of par, common stock 37,500 0 Retained earnings 185,000 120.125 Total liabilities and equily $ 513,391 $430.epo FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $582,500 Cost of goods sold 285,000 Gross profit 297.500 Operating expenses Depreciation expense $ 20,750 Other expenses 132.400 153,150 Other gains (losses) Loss on sale of equipment (5.125) Income before taxes 139,225 Income taxes expense 24.250 Net Income $114,976 2 400 Words English (US No Spacing Heading 1 Heading 2 Title Subtitle Subtle Emp Emphus Additional Information on Current Year Transactions c. a. The loss on the cash sale of equipment was $5,125 (details in b). b. Sold equipment costing $46,875, with accumulated depreciation of $30,125, for $11,625 cash. Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term note payable for the balance. d. Borrowed $4,000 cash by signing a short-term note payable. e. Paid $50,125 cash to reduce the long-term notes payable. f. Issued 2,500 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $50.100. Required: Prepare a complete statement of cash flows using the indirect method for the current year
