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 Current Year Prior Year $ 52,900 68,810 278,656 1,270 401,636 155,500 (37,625) $ 519,511 $ 75,500 52,625 253,800 1,995 383,920 110,000 (47,000) $ 446,920 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 $ 55,141 10,600 65,741 64,000 129,741 $ 117,675 6,400 124,075 50,750 174,825 152,250 165,750 40,500 183,520 $ 519,511 119,845 $ 446,920 $ 592,500 287,000 305,500 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 22,750 Other expenses 134,400 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 157,150 (7,125) 141, 225 27,050 $ 114,175 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $7,125 (details in b). b. Sold equipment costing $52,875. with accumulated depreciation of $32125, for $13.625 cash. c. Purchased equipment costing $98.375 by paying $34.000 cash and signing a long-term note payable for the balance. d. Borrowed $4,200 cash by signing a short-term note payable. e. Paid $51,125 cash to reduce the long-term notes payable. f. Issued 2.700 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $50.500 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 Cash flows from investing activities Required information Required: Prepare a complete statement of cash flows using a spreadsheet using the indirect method (Enter all amounts as positive values.) FORTEN COMPANY Spreadsheet for Statement of Cash Flows For Current Year Ended December 31 Analysis of Changes December 31, Prior Debit Credit Year December 31, Current Year Balance sheetdebit Cash $ 75.500 $ 52,900 Accounts receivable 52,625 253.800 Inventory Prepaid expenses Equipment 1.995 110.000 493 920 $ 47.600 Balance sheet-credit Accumulated depreciation Equipment Accounts payable Short-term notes payable 117 6715 61400 ! 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 50.750 152,250 Long-term notes payable Common stock, $5 par value Paid-in capital in excess of par value, common stock Retained earnings 0 119.845 493,920 $ Statement of cash flows Operating activities Investing activities ! Required information Investing activities Financing activities Non cash investing and financing activities Purchase of equipment financed by long-term note payable GOLDEN CORPORATION 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. Cash flows from investing activities Cash flows from financing activities 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 GOLDEN CORPORATION Spreadsheet for Statement of Cash Flows For Current Year Ended December 31 Analysis of Changes December 31, Prior Year Debit Credit December 31, Current Year Balance sheet-debit balance accounts Cash $ 119.100 $ 175,000 Accounts receivable 82,000 537 000 Inventory Equipment 310.000 $ 1,048, 100 $ 109.500 82.000 Balance sheet credit balance accounts Accumulated depreciation Equipment Accounts payable Income taxes payable Common stock, $2 par value Paid-in capital in excess of par value, common stock 30.600 579.000 176 500 Required information Retained earnings 70,500 1,048, 100 $ Statement of cash flows Operating activities Investing activities Financing activities Investing activities Financing activities