FORTEN COMPANY
Statement of Cash Flows
Use the following information for the Problems below. Forten Company, a merchandiser, recently completed its calendar-year 2017 operations. For the year, ( al 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 Conparative 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 Liabilities and Equity Accounts payable Short-tern notes payable Total current liabilities Long-tern 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 $ 78,400 94,460 92,500 69,625 270, 800 2,275 304,156 1,400 478,416 138,500 435,200 127,000 55,500 46,125 S 570,791 506,700 $ 72,141 143,175 15,700 87,841 55,500 9,800 152,975 67,750 220,725 143,341 200,750 170,200 169,250 56,500 16,725 S 570,791 506,700 FORTEN COMPANY Incone Statement For Year Ended December 31, 2017 Cost of goods sold Gross profit Operating expenses 677,500 304,000 373, 500 Depreciation expense 39,750 151,400 191,150 Other expensers Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 158,225 107,375 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. Problem 16-3A Indirect: Statement of cash flows LO A1, P1, P2, P3 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.) 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 financing activities: 0 0 Net increase (decrease) in cash Cash balance at beginning of year Cash balance at end of year 0
