Forten Company, a merchandiser, recently completed its calendar-year 2013 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 companys balance sheets and income statement follow. FORTEN COMPANY Comparative Balance Sheets December 31, 2013 and 2012 2013 2012 Assets Cash $ 49,800 $ 73,000 Accounts receivable 65,900 53,000 Merchandise inventory 276,000 252,000 Prepaid expenses 1,000 1,500 Equipment 157,000 108,000 Accum. depreciationEquipment (36,375) (46,000) Total assets $ 513,325 $ 441,500 Liabilities and Equity Accounts payable $ 55,175 $ 112,000 Short-term notes payable 11,000 7,000 Long-term notes payable 62,500 48,500 Common stock, $5 par value 162,250 150,500 Paid-in capital in excess of par, common stock 35,250 0 Retained earnings 187,150 123,500 Total liabilities and equity $ 513,325 $ 441,500 FORTEN COMPANY Income Statement For Year Ended December 31, 2013 Sales $ 582,500 Cost of goods sold 284,000 Gross profit 298,500 Operating expenses Depreciation expense $ 20,000 Other expenses 133,200 153,200 Other gains (losses) Loss on sale of equipment (5,250) Income before taxes 140,050 Income taxes expense 25,500 Net income $ 114,550 Additional Information on Year 2013 Transactions a. The loss on the cash sale of equipment was $5,250 (details in b). b. Sold equipment costing $46,500, with accumulated depreciation of $29,625, for $11,625 cash. c. Purchased equipment costing $95,500 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 $51,500 cash to reduce the long-term notes payable. f. Issued 2,350 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $50,900. Required: Prepare a complete statement of cash flows; report its operating activities according to the direct method. (Amounts to be deducted should be indicated with a minus sign.)