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 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities 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 Current Year Prior Year $ 83,500 $ 64,900 80,870 290, 656 1,310 437,736 147,500 (41,625) $543, 611 $ 63,141 13,000 76,141 60,000 136,141 177,750 52,500 177,220 $543, 611 60,625 261,800 2,095 408, 020 118,000 (51,000) $475,020 $129, 675 8,000 137,675 58,750 196,425 160, 250 118, 345 $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 Other expenses $ 30,750 142,400 173, 150 Other gains (losses) Loss on sale of equipment (15,125) Income before taxes Income taxes expense Net income 149,225 38,250 $110,975 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $15,125 (details in b). b. Sold equipment costing $76,875, with accumulated depreciation of $40,125, for $21,625 cash. c. Purchased equipment costing $106,375 by paying $50,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,000 cash by signing a short-term note payable. e. Paid $55,125 cash to reduce the long-term notes payable. f. Issued 3,500 shares of common stock for $20 cash per share. g. 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.) 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: 8 -Problems in Con Required information 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