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. $ 642,500 297,000 345,500 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) $ 144,400 Depreciation expense 32,750 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 177, 150 (17,125) 151, 225 41,050 $ 110,175 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 67,900 83,890 293,656 1,330 446,776 145,500 (42,625) $ 549,651 $ 85,500 62,625 263,800 2,135 414,060 120,000 (52,000) $ 482,060 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 $ 65, 141 72,600 137,741 $ 132,675 69, 150 201,825 180,750 55,500 175,660 549,651 162,250 0 117,985 482,060 LA Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $17,125 (details in b). b. Sold equipment costing $82,875, with accumulated depreciation of $42,125, for $23,625 cash. c. Purchased equipment costing $108,375 by paying $54,000 cash and signing a long-term notes payable for the balance. d. Paid $50,925 cash to reduce the long-term notes payable. e. Issued 3,700 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $52,500. 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.) FOR TEN 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 $ 0 Cash flows from investing activities 0