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, and (4) all debits to Accounts Payable reflect cash payments for inventory. FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold $ 652,500 299,000 Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 353,500 $146,400 34,750 181,150 (19,125) 153,225 43,850 $ 109,375 Assets Cash FORTEN COMPANY Comparative Balance Sheets December 31 Accounts receivable Prepaid expenses Inventory Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable. Total liabilities Equity Current Year Prior Year $ 70,900 86,910 $ 87,500 64,625 265,800 296,656 1,350 2,175 455,816 420,100 143,500 122,000 (43,625) (53,000) $ 555,691 $489,100 $ 67,141 72,200 139,341 $ 135,675 71,550 207,225 Common stock, $5 par value. Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $19.125 (details in b). 183,750 164,250 58,500 0 174,100 117,625 $ 555,691 $489,100 b. Sold equipment costing $88,875, with accumulated depreciation of $44,125, for $25,625 cash c. Purchased equipment costing $110,375 by paying $58,000 cash and signing a long-term notes payable for the balance. d. Paid $51,725 cash to reduce the long-term notes payable. e. Issued 3,900 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $52,900 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.) Cash flows from operating activities FORTEN COMPANY Statement of Cash Flows: For Current Year Ended December 31 Adjustments to reconcile net income to net cash provided by operations Income statement items not affecting cash Changes in current assets and current liabilities Cash flows from investing activities Cash flows from financing activities Net increase (decrease) in cash Cash balance at December 31 prior year Cash balance at December 31, current year