Correct the Incorrect Fields

Label Options:

• Cash borrowed on short-term note
• Cash paid for dividends
• Cash paid for equipment
• Cash paid on long-term notes
• Cash received from issuing stock
• Cash received from sale of equipment
• Decrease in accounts payable
• Decrease in accounts receivable
• Decrease in inventory
• Decrease in prepaid expenses
• Depreciation expense
• Increase in accounts payable
• Increase in accounts receivable
• Increase in inventory
• Increase in prepaid expenses
• Loss on disposal of equipment

Required information [The following information applies to the questions displayed below.] 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, and (4) all debits to Accounts Payable reflect cash payments for inventory. Additional Information on Current Year Transactions 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. c. Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term notes payable for the balance. d. Paid $46,125 cash to reduce the long-term notes payable. e. Issued 2,500 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $50,100. \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{ For Current Year Ended December 31} \\ \hline \multicolumn{4}{|l|}{ Cash flows from operating activities } \\ \hline Net income & & 139,225 & \\ \hline \multicolumn{4}{|c|}{\begin{tabular}{l} Adjustments to reconcile net income to net cash provided by \\ operations: \end{tabular}} \\ \hline \multicolumn{4}{|l|}{ Income statement items not affecting cash } \\ \hline Depreciation expense & & 20,750 & \\ \hline Loss on disposal of equipment & & 5,125 & \\ \hline \multicolumn{4}{|c|}{ Changes in current assets and current liabilities } \\ \hline Increase in accounts receivable & & (15,185) & \\ \hline Increase in inventory & & (23,856) & \\ \hline Decrease in prepaid expenses & & 625 & \\ \hline \multirow[t]{2}{*}{ Decrease in accounts payable } & & (61,534) & \\ \hline & & (24,250) & \\ \hline Net cash used in operating activities & x & & 40,900 \\ \hline \multicolumn{4}{|l|}{ Cash flows from investing activities } \\ \hline Cash received from sale of equipment & & 11,625 & \\ \hline Cash paid for equipment & & (30,000) & \\ \hline Net cash provided by investing activities & x & & (18,375) \\ \hline \multicolumn{4}{|l|}{ Cash flows from financing activities: } \\ \hline Cash received from sale of equipment & & (46,125) & \\ \hline Cash paid for equipment & & 50,000 & \\ \hline \multirow[t]{2}{*}{ Cash paid on long-term notes } & & (50,100) & \\ \hline & & & (46,225) \\ \hline Net increase (decrease) in cash & & & $(23,700) \\ \hline \multicolumn{4}{|l|}{ Cash balance at December 31, prior year } \\ \hline Cash balance at December 31, current year & & & $(23,700) \\ \hline \end{tabular}