Forten Company, a merchandiser, recently completed its calendar-year 2015 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 income statement and balance sheets follow.

FORTEN COMPANY Comparative Balance Sheets December 31, 2015 and 2014
	2015			2014
Assets
Cash	$	51,119		$	64,500
Accounts receivable		68,625			53,625
Inventory		271,156			245,800
Prepaid expenses		1,300			1,725
Total current assets		392,200			365,650
Equipment		147,125			105,000
Accum. depreciationEquipment		(38,050)			(45,000)
Total assets	$	501,275		$	425,650
Liabilities and Equity
Accounts payable	$	59,575		$	108,950
Short-term notes payable		7,000			4,500
Total current liabilities		66,575			113,450
Long-term notes payable		35,425			35,500
Total liabilities		102,000			148,950
Equity
Common stock, $5 par value		156,250			146,250
Paid-in capital in excess of par, common stock		30,000			0
Retained earnings		213,025			130,450
Total liabilities and equity	$	501,275		$	425,650

FORTEN COMPANY Income Statement For Year Ended December 31, 2015
Sales				$	597,500
Cost of goods sold					291,000
Gross profit					306,500
Operating expenses
Depreciation expense	$	18,500
Other expenses		127,050			145,550
Other gains (losses)
Loss on sale of equipment					(4,125)
Income before taxes					156,825
Income taxes expense					27,250
Net income				$	129,575

Additional Information on Year 2015 Transactions

a. The loss on the cash sale of equipment was $4,125 (details in b).

b. Sold equipment costing $43,925, with accumulated depreciation of $25,450, for $14,350 cash.

c. Purchased equipment costing $86,050 by paying $45,000 cash and signing a long-term note payable for the balance.

d. Borrowed $2,500 cash by signing a short-term note payable.

e. Paid $41,125 cash to reduce the long-term notes payable.

f. Issued 2,000 shares of common stock for $20 cash per share.

g. Declared and paid cash dividends of $47,000. 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.)