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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

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 $ 64,900 $ 83,500
Accounts receivable 80,870 60,625
Inventory 290,656 261,800
Prepaid expenses 1,310 2,095
Total current assets 437,736 408,020
Equipment 147,500 118,000
Accum. depreciationEquipment (41,625 ) (51,000 )
Total assets $ 543,611 $ 475,020
Liabilities and Equity
Accounts payable $ 63,141 $ 129,675
Short-term notes payable 13,000 8,000
Total current liabilities 76,141 137,675
Long-term notes payable 60,000 58,750
Total liabilities 136,141 196,425
Equity
Common stock, $5 par value 177,750 160,250
Paid-in capital in excess of par, common stock 52,500 0
Retained earnings 177,220 118,345
Total liabilities and equity $ 543,611 $ 475,020

FORTEN COMPANY Income Statement For Current Year Ended December 31
Sales $ 632,500
Cost of goods sold 295,000
Gross profit 337,500
Operating expenses
Depreciation expense $ 30,750
Other expenses 142,400 173,150
Other gains (losses)
Loss on sale of equipment (15,125 )
Income before taxes 149,225
Income taxes expense 38,250
Net income $ 110,975

Additional Information on Current Year Transactions

  1. The loss on the cash sale of equipment was $15,125 (details in b).
  2. Sold equipment costing $76,875, with accumulated depreciation of $40,125, for $21,625 cash.
  3. Purchased equipment costing $106,375 by paying $50,000 cash and signing a long-term note payable for the balance.
  4. Borrowed $5,000 cash by signing a short-term note payable.
  5. Paid $55,125 cash to reduce the long-term notes payable.
  6. Issued 3,500 shares of common stock for $20 cash per share.
  7. Declared and paid cash dividends of $52,100.

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.)

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