Forten Company's current year income statement, comparative balance sheets, and additional information follow. 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. FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 60,400 76, 340 286, 156 1,280 424,176 150,500 (40, 125) $534,551 $ 80,500 57, 625 258, 800 2,035 398,960 115,000 (49,500) $464, 460 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 $ 60,141 12,100 72,241 61,500 133, 741 $125, 175 7,400 132,575 55,750 188, 325 157, 250 173,250 48,000 179,560 118,885 Total liabilities and equity $534, 551 $ 464, 460 $617,500 292,000 325,500 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 27,750 Other expenses 139,400 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 167,150 (12,125) 146,225 34,050 $112,175 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $12,125 (details in b). b. Sold equipment costing $67,875, with accumulated depreciation of $37,125, for $18,625 cash. c. Purchased equipment costing $103,375 by paying $44,000 cash and signing a long-term note payable for the balance. d. Borrowed $4,700 cash by signing a short-term note payable. e. Paid $53,625 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 $51,500. -quired: epare a complete statement of cash flows using a spreadsheet using the indirect method. (Enter all amounts as positive values.) Answer is not complete. FORTEN COMPANY Spreadsheet for Statement of Cash Flows For Current Year Ended December 31 Analysis of Changes December 31, Prior Year Analysis of Changes Debit Credit December 31, Current Year $ 20,100 X $ 60,400 76,340 Balance sheet-debit Cash Accounts receivable Inventory Prepaid expenses Equipment 18,715 27,356 80,500 57,625 258,800 2,035 115,000 513,960 286,156 1,280 755 35,500 X 79,500 503,676 $ 9,375 X 65,034 Balance sheetcredit Accumulated depreciation Equipment Accounts payable Short-term notes payable Long-term notes payable Common stock, $5 par value 49,500 125,175 7,400 55,750 157,250 4,700 58,875 60,141 12,100 50,000 173,250 5,750 X 16,000 0 48,000 Paid-in capital in excess of par value, common stock Retained earnings 60,675 X 118,885 513,960 48,000 58,210 460,576 18,715 27,356 Statement of cash flows Operating activities Increase in accounts receivable Increase in inventory Decrease in prepaid expenses Decrease in accounts payable Depreciation expense Loss on sale of equipment 755 65,034 27,750 12,125 Investing activities Receipt from sale of equipment Receipt from sale of equipment 18,625 44,000 4,700 Financing activities Borrowed on short-term note Payment on long-term note Issued common stock for cash Payment of cash dividends 53,625 64,000 51,500 Non cash investing and financing activities Purchase of equipment financed by long-term note payable $ 305,485 $ 394,660
