Connect Homework: Chapter 12 i Forten 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. points Prior Year eBook Print FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Assets Cash $ 75,400 Accounts receivable 91,440 Inventory 301,156 Prepaid expenses 1,380 Total current assets 469,376 Equipment 140,500 Accum. depreciation-Equipment (45,125) Total assets $564,751 Liabilities and Equity Accounts payable $ 70,141 Short-term notes payable 15,100 Total current liabilities 85,241 Long-term notes payable 56,500 Total liabilities 141,741 Equity Common stock, $5 par value 188,250 Paid-in capital in excess of par, common stock 63,000 Retained earnings 171,760 Total liabilities and equity $564,751 $ 90,500 67,625 268,800 2,235 429, 160 125,000 (54,500) $499,660 References $140,175 9,400 149,575 65,750 215,325 167,250 117,085 $499,660 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $667,500 Cost of goods sold 302,000 Gross profit 365,500 Operating expenses Depreciation expense $ 37,750 Other expenses 149,400 187,150 Other gains (losses) Loss on sale of equipment (22,125) Income before taxes 156,225 Income taxes expense 48, 050 Net income $108,175 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $22,125 (details in b). b. Sold equipment costing $97,875, with accumulated depreciation of $47,125, for $28,625 cash. c. Purchased equipment costing $113,375 by paying $64,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,700 cash by signing a short-term note payable. e. Paid $58,625 cash to reduce the long-term notes payable, f. Issued 4,200 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $53,500. Connect Homework: Chapter 12 i Required information Additional Information on Current Year Transactions points a. The loss on the cash sale of equipment was $22,125 (details in b). b. Sold equipment costing $97,875, with accumulated depreciation of $47,125, for $28,625 cash. c. Purchased equipment costing $113,375 by paying $64,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,700 cash by signing a short-term note payable. e. Paid $58,625 cash to reduce the long-term notes payable. f. Issued 4,200 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $53,500. eBook Print References 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 31 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 increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year
