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 $ 597,500 Cost of goods sold 288,000 Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) 309,500 $ 135,400 23,750 159,150 Loss on sale of equipment Income before taxes (8,125) 142,225 Income taxes expense Net income 28,450 $ 113,775 FORTEN COMPANY Comparative Balance Sheets December 31 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Current Year Prior Year $ 54,400 70,310 $ 76,500 53,625 254,800 280,156 1,280 2,005 406,146 386,930 111,000 154,500 (38,125) $ 522,521 (47,500) $ 450,430 Long-term 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 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $8,125 (details in b). $ 56,141 74,400 $ 119,175 58,350 130,541 177,525 167,250 153,250 42,000 0 182,730 119,655 $ 522,521 $ 450,430 b. Sold equipment costing $55,875, with accumulated depreciation of $33,125, for $14,625 cash. c. Purchased equipment costing $99,375 by paying $36,000 cash and signing a long-term notes payable for the balance. d. Paid $47,325 cash to reduce the long-term notes payable. e. Issued 2,800 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $50,700. 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 flows from operating activities 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