Forten Company, a merchandiser, recently completed its calendar-year 2017 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 company's income statement and balance sheets follow FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 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 $ 60,400 76,340 286, 156 1,280 424,176 150,500 (40,125) $ 534,551 $ 80,500 57,625 258,888 2,035 398,960 115,000 (49,500) $ 464,460 $ 60,141 12, 100 72,241 61,500 133, 741 $ 125, 175 7,480 132,575 55,750 188,325 176 157,250 Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity 176,750 44,500 179,560 $ 534,551 118,885 $ 464,460 $ 617,500 292,000 325,500 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 27,750 Other expenses 139,400 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 167,150 (12,125) 146, 225 34,850 $ 112, 175 Problem 12-4AA Indirect: Cash flows spreadsheet LO P1, P2, P3, P4 Additional Information on Year 2017 Transactions a. Net income was $112.175. b. Accounts receivable increased. C. Inventory increased. d. Prepaid expenses decreased. e. Accounts payable decreased. f. Depreciation expense was $27.750. g. Sold equipment costing $67,875, with accumulated depreciation of $37125, for $18,625 cash. This yielded a loss of $12.125. h. Purchased equipment costing $103,375 by paying $44,000 cash and (i.) by signing a long-term note payable for the balance I. Borrowed $4,700 cash by signing a short-term note payable. J. Paid $53,625 cash to reduce the long-term notes payable. k. Issued 3,200 shares of common stock for $20 cash per share. 1. Declared and paid cash dividends of $51,500. Required: Prepare a complete statement of cash flows using a spreadsheet: report its operating activities using the Indirect method. (Enter all amounts as positive values.) TERDAY FORTEN COMPANY Spreadsheet for Statement of Cash Flows For Year Ended December 31, 2017 Analysis of Changes December 31, 2016 Debit Credit December 31, 2017 Balance sheetdebit $ 60,400 Cash Accounts receivable Inventory Prepaid expenses Equipment 80,500 57,625 258,800 2,035 115,000 513,960 $ 60,400 Balance sheet-credit Accumulated depreciation Equipment Accounts payable Short-term notes payable Long-term notes payable 49,500 125, 175 7,400 55,750 Am intim Required information www puu Long-term notes payable Common stock, $5 par value Paid-in capital in excess of par value, common stock Retained earnings 55.750 157,2507 118,8857 513,960 Statement of cash flows Operating activities Net income Increase in accounts receivable Increase in inventory Decrease in prepaid expenses Decrease in accounts payable Depreciation expenso Loss on sale of equipment Investing activities Receipt from sale of equipment VOLVO HILO LAUTUS Required information Loss on sale of equipment Investing activities Receipt from sale of equipment Payment to purchase equipment Financing activities Borrowed on short-term note Payment on long-term note Issued common stock for cash Payment of cash dividends Non cash investing and financing activities Purchase of equipment financed by long-term note payable $ 0 S