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 $ 607,500 Cost of goods sold 290,000 Gross profit Operating expenses (excluding depreciation) $ 137,400 Depreciation expense 317,500 25,750 163,150 Other gains (losses) Loss on sale of equipment Income before taxes (10,125) Income taxes expense Net income Assets Cash Accounts receivable 144,225 31,250 $112,975 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 57,400 73,320 $ 78,500 55,625 256,800 Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable 283,156 1,260 1,995 415,136 392,920 113,000 152,500 (39,125) $ 528,511 $ 58,141 (48,500) $ 457,420 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 $122,175 74,000 132,141 60,750 182,925 170,250 155,250 45,000 181,120 0 119,245 $ 528,511 $ 457,420 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $10,125 (details in b). b. Sold equipment costing $61,875, with accumulated depreciation of $35,125, for $16,625 cash. c. Purchased equipment costing $101,375 by paying $40,000 cash and signing a long-term notes payable for the balance. d. Paid $48,125 cash to reduce the long-term notes payable. e. Issued 3,000 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $51,100. Problem 12-3A (Algo) Indirect: Statement of cash flows LO A1, P2, P3 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.) 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 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