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		$ 647,500
Cost of goods sold		298,000
Gross profit		349,500
Operating expenses (excluding depreciation)	$ 145,400
Depreciation expense	33,750	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

FORTEN COMPANY
Comparative Balance Sheets
December 31
	Current Year	Prior Year
Assets
Cash	$ 69,400	$ 86,500
Accounts receivable	85,400	63,625
Inventory	295,156	264,800
Prepaid expenses	1,340	2,155
Total current assets	451,296	417,080
Equipment	144,500	121,000
Accumulated depreciationEquipment	(43,125)	(52,500)
Total assets	$ 552,671	$ 485,580
Liabilities and Equity
Accounts payable	$ 66,141	$ 134,175
Long-term notes payable	72,400	70,350
Total liabilities	138,541	204,525
Equity
Common stock, $5 par value	182,250	163,250
Paid-in capital in excess of par, common stock	57,000	0
Retained earnings	174,880	117,805
Total liabilities and equity	$ 552,671	$ 485,580

Additional Information on Current Year Transactions

The loss on the cash sale of equipment was $18,125 (details in b).

Sold equipment costing $85,875, with accumulated depreciation of $43,125, for $24,625 cash.

Purchased equipment costing $109,375 by paying $56,000 cash and signing a long-term notes payable for the balance.

Paid $51,325 cash to reduce the long-term notes payable.

Issued 3,800 shares of common stock for $20 cash per share.

Declared and paid cash dividends of $52,700.

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