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 2016 2017 Assets $92,500 Cash $78,400 Accounts receivable Inventory Prepaid expenses 94,460 304,156 69,625 270,800 1,400 478,416 138,500 2,275 435,200 Total current assets Equipment Accum. depreciation-Equipment 127,000 (46,125) (55,500) $570,791 $506,700 Total assets Liabilities and Equity Accounts payable Short-term notes payable $ 72,141 15,700 $143,175 9,800 Total current liabilities 87,841 152,975 67,750 220,725 Long-term notes payable 55,500 143,341 Total liabilities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings 200,750 56,500 170,200 169,250 116,725 Total liabilities and equity $570,791 $506,700 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales $677,500 304,000 373,500 Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses 39,750 151,400 191,150 Other gains (losses) Loss on sale of equipment (24,125) Income before taxes Income taxes expense 158,225 50,850 $107,375 Net income Additional Information on Year 2017 Transactions a. The loss on the cash sale of equipment was $24,125 (details in b) b. Sold equipment costing $103,875, with accumulated depreciation of $49,125, for $30,625 cash c. Purchased equipment costing $115,375 by paying $68,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,900 cash by signing a short-term note payable. e. Paid $59,625 cash to reduce the long-term notes payable. f. Issued 4,400 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $53,900 Required: Prepare a complete statement of cash flows; report its operating activities according to the direct method. (Amounts to be deducted should be indicated with a minus sign.) Statement of Cash Flows For Year Ended December 31, 2017 Cash flows from operating activities C Cash flows from investing activities 0 Cash flows from financing activities 0 Net increase (decrease) in cash Cash balance at beginning of year C Cash balance at end of year C