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 $ 55,900 71,810 281,656 1,250 410.616 153,500 (38,625) $525,491 $ 77,500 54,625 255, 800 1,975 389, 900 112,000 (48,000) $453, 900 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 Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 57,141 $120,675 11, 2006 ,800 68, 341 127, 475 63,000 52,750 131, 341 180, 225 170,750 41,500 181,900 $525,491 154,250 0 119, 425 $453,900 $ 602,500 289,000 313,500 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 24,750 Other expenses 136,400 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 161, 150 (9,125) 143, 225 29,850 $113, 375 Additional Information on Year 2017 Transactions a. The loss on the cash sale of equipment was $9,125 (details in b). b. Sold equipment costing $58,875, with accumulated depreciation of $34,125, for $15,625 cash. c. Purchased equipment costing $100,375 by paying $38,000 cash and signing a long-term note payable for the balance. d. Borrowed $4.400 cash by signing a short-term note payable. e. Paid $52,125 cash to reduce the long-term notes payable. f. Issued 2.900 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $50,900. VIVERE Statement of Cash Flows For Year Ended December 31, 2017 Cash flows from operating activities Cash paid for other expenses Cash paid for inventory Cash received from customers Cash paid for income taxes Net cash provided by operating activities Cash flows from investing activities Cash received from sale of equipment | Cash paid for equipment 15,625 (38,000) (22,375) Net cash used in investing activities Cash flows from financing activities Cash paid for dividends Cash paid on long-term note Cash received from issuing stock (50,900) (52,125) 58,000 $ Net cash used in financing activities Net increase (decrease in cash Cash balance at beginning of year Cash balance at end of year (45,025) (67,400) $ (67,400)
