Check Use the following information for the Problems below. [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 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. The company's income statement and balance sheets follow. FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 $ 61,900 77,850 287,656 1,290 428,696 149,500 (40,625) $537,571 $ 81,500 I 58,625 259,800 2,055 401,980 116,000 (50,000) $467,980 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. 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 $ 61,141 12,400 73,541 61,000 134,541 $126,675 7,600 134,275 56,750 191,025 178,750 45,500 178,780 $537,571 158,250 0 118,705 $467,980 Check $622,500 293,000 329,500 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 28,750 Other expenses 140,400 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expenso Net income 169, 150 (13, 125) 147,225 35,450 $111,775 Problem 12-3A Indirect: Statement of cash flows LO A1, P1, P2, P3 Additional Information on Year 2017 Transactions a. The loss on the cash sale of equipment was $13,125 (details in b). b. Sold equipment costing $70,875, with accumulated depreciation of $38,125, for $19,625 cash. c. Purchased equipment costing $104,375 by paying $46,000 cash and signing a long-term note payable for the balance. d. Borrowed $4,800 cash by signing a short-term note payable. e. Paid $54,125 cash to reduce the long-term notes payable. f. Issued 3,300 shares of common stock for $20 cash per share. 9. Declared and paid cash dividends of $51,700. Check my wort 4 Required information Required: 1. Prepare a complete statement of cash flows; report its operating activities using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) 07:37 FORTEN COMPANY Statement of Cash Flows For Year Ended December 31, 2017 Cash flows from operating activities Net income $ 111.775 Adjustments to reconcile net income to net cash provided by operations: Accounts receivable increase 19.225 Inventory Increase 27,856 Prepaid expense decrease (765) Accounts payable decrease (65,534) Notes payable long-term decrease 4,800 97,357 Not cash provided by operating activities Cash flows from investing activities Cash received from sale of equipment Cash paid for equipment 70.875 70.875 Notes payable long-term decrease 4,800 20 points 02:07:20 97,357 $ Net cash provided by operating activities Cash flows from investing activities Cash received from sale of equipment Cash paid for equipment 70,875 eBook 70,875 Cash flows from financing activities: 0 168,232 Net increase (decrease) in cash Cash balance at beginning of year Cash balance at end of year $ 168,232
