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. $ 602,500 289,000 313,500 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) $ 136,400 Depreciation expense 24,750 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 161,150 (9,125) 143, 225 29,850 $ 113,375 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 55,900 71,810 281,656 1,250 410,616 153,500 (38,625) $ 525,491 $ 77,500 54,625 255,800 1,975 389,900 112,000 (48,000) $ 453,900 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable 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 $ 57,141 74,200 131,341 $ 120,675 59,550 180,225 154,250 168,750 43,500 181,900 $ 525,491 119,425 $ 453,900 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $9,125 (details in b). b. Sold equipment costing $58,875, with accumulated depreciation of $34,125, for $15,625 cash. c. Purchased equipment costing $100,375 by paying $38,000 cash and signing a long-term notes payable for the balance. d. Paid $47,725 cash to reduce the long-term notes payable. e. Issued 2,900 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $50,900. 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 Net income Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Depreciation expense Changes in current assets and current liabilities $ 0 Cash flows from investing activities 0 Cash flows from financing activities: 0 EA $ 0 Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $ 0