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 $627,500 Cost of goods sold, 294,000 Gross profit Operating expenses (excluding depreciation) $ 141,400 333,500 Depreciation expense Other gains (losses) Loss on sale of equipment Income before taxes 29,750 171,150 (14,125) 148,225 Income taxes expense Net income 36,850 $111,375 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 63,400 79,360 $ 82,500 59,625 260,800 289,156 1,300 2,075 433,216 405,000 148,500 $540,591 (41,125) 117,000 (50,500) $471,500 $62,141 $ 128,175 Long-term notes payable 73,200 65,550 Total liabilities 135,341 193,725 Equity Common stock, $5 par value 176,250 159,250 Paid-in capital in excess of par, common stock. $1,000 0 Retained earnings 178,000 110,525 Total liabilities and equity $540,591 471,500 Prev 1 of 9 Next > rences a. The loss on the cash sale of equipment was $14,125 (details in b). b. Sold equipment costing $73,875, with accumulated depreciation of $39,125, for $20,625 cash. c. Purchased equipment costing $105,375 by paying $48,000 cash and signing a long-term notes payable for the balance. d. Paid $49,725 cash to reduce the long-term notes payable. e. Issued 3,400 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $51,900, Required: 1. Prepare a complete statement of cash flows using the indirect method for the current year. Note: Amounts to be deducted should be indicated with a minus sign. Cash flows from operating activities Net income 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 Trash we from inuetin sein $ es Required information 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 $ 0 0 $ 0 $ 0 0