FORTEN COMPANY Statement of Cash Flows For Year Ended December 31, 2013 Cash flows from operating activities Net Income Adjustments to reconcile net income to net cash provided by operations: \begin{tabular}{|l|l|l|} \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Cash flows from investing activities & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Cash flows from financing activities: & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline \end{tabular} Additional Information on Year 2013 Transactions a. The loss on the cash sale of equipment was $4,425 (details in b). b. Sold equipment costing $45,425, with accumulated depreciation of $26,050, for $14,950 cash. c. Purchased equipment costing $87,850 by paying $60,000 cash and signing a longterm note payable for the balance. d. Borrowed $3,700 cash by signing a short-term note payable. e. Paid $43,525 cash to reduce the long-term notes payable. f. Issued 3,200 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $51,800. Required: 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.) Additional Information on Year 2013 Transactions a. The loss on the cash sale of equipment was $4,425 (details in b). b. Sold equipment costing $45,425, with accumulated depreciation of $26,050, for b. $14,950 cash. c. Purchased equipment costing $87,850 by paying $60,000 cash and signing a long- \begin{tabular}{|c|c|c|} \hline Cash flows from operating activities & & \\ \hline Net Income & & \\ \hline Adjustments to reconcile net incor & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & $ & 0 \\ \hline Cash flows from investing activities & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & 0 \\ \hline Cash flows from financing activities: & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & 0 \\ \hline Net increase (decrease) in cash & $ & 0 \\ \hline Cash balance at beginning of year & & \\ \hline Cash balance at end of year & $ & 0 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{\begin{tabular}{c} FORTEN COMPANY \\ Comparative Balance Sheets \\ December 31,2013 and 2012 \end{tabular}} \\ \hline & 2013 & 2012 \\ \hline \multicolumn{3}{|l|}{ Assets } \\ \hline Cash & $66,379 & $70,500 \\ \hline Accounts receivable & 77,025 & 59,625 \\ \hline Merchandise inventory & 262,156 & 233,800 \\ \hline Prepaid expenses & 1,540 & 2,025 \\ \hline Equipment & 159,425 & 117,000 \\ \hline Accum. depreciation-Equipment & (50,650) & (57,000) \\ \hline Total assets & $515,875 & $425,950 \\ \hline \multicolumn{3}{|l|}{ Liabilities and Equity } \\ \hline Accounts payable & $58,375 & $110,750 \\ \hline Short-term notes payable & 9,400 & 5,700 \\ \hline Long-term notes payable & 25,825 & 41,500 \\ \hline Common stock, $5 par value & 165,250 & 149,250 \\ \hline \begin{tabular}{l} Paid-in capital in excess of par, common \\ stock \end{tabular} & 48,000 & 0 \\ \hline Retained earnings & 209,025 & 118,750 \\ \hline Total liabilities and equity & $515,875 & $425,950 \\ \hline & & = \\ \hline \end{tabular} FORTEN COMPANY Forten Company, a merchandiser, recently completed its calendar-year 2013 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 balance sheets and income statement follow
