Expenses are paid in advance and are initially debited to Prepaid Expenses. FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 54,400 70, 310 280, 156 1,280 406, 146 154,500 (28,125) $ 522,521 $ 76,500 53,625 254,800 2,005 386,930 111,000 (47,500) $.450, 430 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, 55 par value Paid in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 56,141 10,900 67,041 63,500 130,541 $ 119,175 6,600 125,775 51.750 177,525 153,250 167,250 42,000 182,730 $ 522,521 119,655 $ 450, 430 FORTEN COMPANY Income Statement prov $ 597,500 288,000 309,500 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 23,750 Other expenses 135,400 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 159,150 (8,125) 142,225 28,450 $ 113,775 Additional Information on Current Year Transactions The lace on the cash sale of equipment was $8.125 (details in b). Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $8,125 (details in b). b. Sold equipment costing $55,875, with accumulated depreciation of $33,125, for $14.625 cash. c. Purchased equipment costing $99,375 by paying $36,000 cash and signing a long-term note payable for the balance. d. Borrowed $4.300 cash by signing a short-term note payable. e. Paid $51,625 cash to reduce the long-term notes payable. f. Issued 2,800 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $50.700. Required: Prepare a complete statement of cash flows using the direct method. (Amounts to be deducted sign.) FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities $ 142,225 ces $ 142.225 Cash flows from investing activities Required information $ 142,225 Cash flows from investing activities 0 ces Cash flows from financing activities Net Increase (decrease in cash Cash balance at December 31 prior year Cash balance at December 31 current year 0 142 225 76 500 218.725 S