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		$ 617,500
Cost of goods sold		292,000
Gross profit		325,500
Operating expenses (excluding depreciation)	$ 139,400
Depreciation expense	27,750	167,150
Other gains (losses)
Loss on sale of equipment		(12,125)
Income before taxes		146,225
Income taxes expense		34,050
Net income		$ 112,175

FORTEN COMPANY
Comparative Balance Sheets
December 31
	Current Year	Prior Year
Assets
Cash	$ 60,400	$ 80,500
Accounts receivable	76,340	57,625
Inventory	286,156	258,800
Prepaid expenses	1,280	2,035
Total current assets	424,176	398,960
Equipment	150,500	115,000
Accumulated depreciationEquipment	(40,125)	(49,500)
Total assets	$ 534,551	$ 464,460
Liabilities and Equity
Accounts payable	$ 60,141	$ 125,175
Long-term notes payable	73,600	63,150
Total liabilities	133,741	188,325
Equity
Common stock, $5 par value	173,250	157,250
Paid-in capital in excess of par, common stock	48,000	0
Retained earnings	179,560	118,885
Total liabilities and equity	$ 534,551	$ 464,460

Additional Information on Current Year Transactions

1. The loss on the cash sale of equipment was $12,125 (details in b).
2. Sold equipment costing $67,875, with accumulated depreciation of $37,125, for $18,625 cash.
3. Purchased equipment costing $103,375 by paying $44,000 cash and signing a long-term notes payable for the balance.
4. Paid $48,925 cash to reduce the long-term notes payable.
5. Issued 3,200 shares of common stock for $20 cash per share.
6. Declared and paid cash dividends of $51,500.

Required: 1. Prepare a complete statement of cash flows using the indirect method for the current year.

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 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