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 $ 49,800 73,500 50,625 251,800 1,250 ,812 65,810 275,656 1,875 377,800 108,000 46,000 $513,391 439,800 392, 516 157,500 (36,625) Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term notes payable Total liabilities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 53,141 114,675 6,000 120,675 48,750 169,425 10,000 3 63,141 65,000 128,141 162,750 150,250 37,500 185,000120,123 $ 513,391 439,800 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses $ 582,500 285,000 297,500 Depreciation expense $ 20,7560 132,400 Other expenses Other gains (losses) 153,150 Loss on sale of equipment Income before taxes Income taxes expense Net income 5,125 139,225 24,250 $114,975 Additional Information on Year 2017 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 note payable for the balance d. Borrowed $4,000 cash by signing a short-term note payable e. Paid $50,125 cash to reduce the long-term notes payable f. Issued 2,500 shares of common stock for $20 cash per share g. Declared and paid cash dividends of $50,100 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.) 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 sheet-debit Cash Accounts receivable Inventory Prepaid expenses Equipment 73,500 50,625 251,800 1,875 108,000 485,800 49,800 49,800 Balance sheet-credit Accumulated depreciation Equipment Accounts payable Short-term notes payable 46,000 114,675 6,000 Long-term notes payable Common stock, $5 par value Paid-in capital in excess of par value, common stock Retained earnings 48,750 150,250 120,125 485,800 Statement of cash flows Operating activities Net income Depreciation expense Increase in accounts receivable Decrease in inventory Decrease in accounts payable Investing activities Cash paid for inventory Financing activities Financing activities Non cash investing and financing activities Purchase of equipment financed by long-term note payable