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 Part 2 of 2 Current Year Prior Year points $ 69,400 85,400 295, 156 1.340 451,296 144.500 (43, 125) $552,671 $ 86,500 63,625 264.800 2,155 417.080 121,000 (52,500) $485,580 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accun. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Short-tern notes payable Total current liabilities Long-term notes payable Total liabilities Equity Connon stock, $5 par value Pald-in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 66,141 13.900 B0.041 58.500 138,541 $134, 175 8,600 142,775 61,750 204,525 163, 250 182,250 57,000 174,880 $552,671 117,805 $485,580 FORTEN COMPANY Incone Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses 145,400 Other gains (losses) Loss on sale of equipment Incone before taxes Income taxes expense $647,500 298,000 349,500 $ 33,750 179,150 (18,125) 152225 42,450 Retained earnings Total liabilities and equity 174,000 $552,671 117,00 $485,580 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $647,500 Cost of goods sold 298,000 Gross profit 349,500 Operating expenses Depreciation expense $ 33,750 Other expenses 145,400 179, 150 Other gains (losses) Loss on sale of equipment (18,125) Income before taxes 152,225 Income taxes expense 42,450 Net income $109,775 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $18,125 (details in b). b. Sold equipment costing $85,875, with accumulated depreciation of $43,125, for $24,625 cash. c. Purchased equipment costing $109,375 by paying $56,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,300 cash by signing a short-term note payable. e. Paid $56,625 cash to reduce the long-term notes payable. f. Issued 3,800 shares of common stock for $20 cash per share. 9. Declared and paid cash dividends of $52,700. Required: Prepare a complete statement of cash flows using the direct method. (Amounts to be deducted should be indicated with a minus sign.) FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 wam II, Chapters 14, 15 and 160 Help y. WOLUCU U Required: Prepare a complete statement of cash flows using the direct method. (Amounts to be deducted should be indicated with a minus sign.) Part 2 of 2 30 points FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Cash flows from investing activities Cashflows from financing activities Net increase (decrease) in cash Cash balance at December 31. prior year Cash balance at December 31, current year
