Forten Company, a merchandiser, recently completed its calendar-year 2017 operations. For the year, () 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 $ 84,500 $66,400 82,380 292,156 Cash Accounts receivable 61,625 262,800 2,115 Inventory Prepaid expenses 1,320 411,040 119,000 (51,500) 442,256 146,500 Total current assets Equipment Accum. depreciation-Equipment (42,125) $546,631 $478,540 Total assets Liabilities and Equity $ 64,141 13,300 77,441 Accounts payable Short-term notes payable Total current liabilities $131,175 8,200 139,375 Long-term notes payable 59,500 59,750 Total liabilities 136,941 199,125 Equity Common stock, $5 par value 184,750 48,500 161,250 Paid-in capital in excess of par, common stock Retained earnings 0 176,440 118,165 Total liabilities and equity $546,631 $478,540 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales $637,500 296,000 Cost of goods sold Gross profit Operating expenses Depreciatic Other expenses Other gains (losses) Loss on sale of equipment 341,500 31,750 143,400 expense 175,150 (16,125) Income before taxes 150,225 39,650 Income taxes expense $110,575 Net income Problem 12-3A Indirect: Statement of cash flows LO A1, P1, P2, P3 Additional Information on Year 2017 Transactions a. The loss on the cash sale of equipment was $16,125 (details in b) b. Sold equipment costing $79,875, with accumulated depreciation of $41,125, for $22,625 cash. c. Purchased equipment costing $107,375 by paying $52,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,100 cash by signing a short-term note payable. e. Paid $55,625 cash to reduce the long-term notes payable. f. Issued 3,600 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $52,300 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.) FORTEN COMPANY Statement of Cash Flows For Year Ended December 31, 2017 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operations: $ 0 Cash flows from investing activities 0 Cash flows from investing activities Cash flows from financing activities: 0 Net increase (decrease) in cash Cash balance at beginning of year Cash balance at end of year 0 EA