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 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, 95 par value Paid-in capital in excess of par, comotion stock Retained earnings Total liabilities and equity $ 66,400 82,380 292,156 1,320 442,256 146,500 (42,125) $546, 631 $ 84,500 61, 625 262,800 2,115 411,040 119,000 (51, 500) $470, 540 $ 64, 141 23,300 77. 141 59,500 136, 941 $131,175 8.200 139,375 59.750 199,125 179, 250 59,000 176, 140 $546,631 161,250 0 118, 165 6+70, 540 ZORTEN COMPANY Tricome Statement Toe Current Year Ended December 31 Sales $637,500 Cost of goods sold 296.000 Gross proti 341,500 Operating expenses Depreciation expense $31.750 Other expenses 143, 100 175,150 Other gains losses Loon sale of upment 116, 125) Income before taxes 110,225 Inon tax expense 39.650 Het income $110,575 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $16.125 (details in ) b. Sold equipment costing $79,875, with accumulated depreciation of $41125, for $22625 cash c. Purchased equipment costing 5107375 by paying $52.000 cash and signing a long term note payable for the balance d. Borrowed $5,100 cash by signing a short term note payable e. Paid $55625 cash to reduce the long term notes payable Issued 3.600 shares of common stock for $20 cash per share -- Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $16125 (details in b. Sold equipment costing $79.875, with accumulated depreciation of $41125, for $22625 cash c. Purchased equipment costing $107.375 by paying $52.000 cash and signing a long-term note payable for the balance d. Borrowed 55.100 cash by signing a short-term note payable. e. Paid $55,625 cash to reduce the long-term notes payable 1. Issued 3,600 shares of common stock for $20 cash per share. 9. Declared and paid cash dividends of $52,300 Required: 1. Prepare a complete statement of cash flows using the indirect method for the current year (Amounts to be deducted should be indicated with a minus sign.) FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash Sows from operating activities Adjustments to reconcile income to net cash provided by operations 5 0 Cash flows from investing acts Cash Diwstrom inancing at Prey 1 2 Next >
