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 Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income $ 642,500 297,000 345,500 $ 144,400 32,750 177,150 (17,125) 151,225 41,050 $ 110,175 FORTEN COMPANY Comparative Balance Sheets December 31 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 Current Year Prior Year 293,656 $ 67,900 83,890 $ 85,500 62,625 263,800 1,330 2,135 446,776 414,060 145,500 120,000 (42,625) $ 549,651 $ 65,141 72,600 137,741 (52,000) $ 482,060 $ 132,675 69,150 201,825 Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity Additional Information on Current Year Transactions 180,750 162,250 55,500 175,660 117,985 $ 549,651 $ 482,060 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. Required: 1. Prepare a complete statement of cash flows using the indirect method for the current year. Note: Amounts to be deducted should be indicated with a minus sign. Answer is complete and correct. 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 Loss on disposal of equipment Changes in current assets and current liabilities Increase in accounts receivable Increase in inventory Decrease in prepaid expenses Decrease in accounts payable $ 110,175 32,750 17,125 (21,265) (29,856) 805 (67,534) Net cash provided by operating activities S 42,200 Cash flows from investing activities Cash paid for equipment Cash received from sale of equipment (54,000) 23,625 Net cash used in investing activities (30,375) Cash flows from financing activities: Cash paid on long-term notes (50,925) Cash received from issuing stock 74,000 Cash paid for dividends (52,500) Net cash used in financing activities Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year (29,425) $ (17,600) 85,500 $ 67,900 Please help with the Part Two talab 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 $ 642,500 Cost of goods sold 297,000 Gross profit Operating expenses (excluding depreciation) 345,500 $ 144,400 Depreciation expense Other gains (losses). Loss on sale of equipment Income before taxes 32,750 177,150 (17,125) 151,225 Income taxes expense Net income 41,050 $ 110,175 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 67,900 83,890 293,656 1,330 446,776 $ 85,500 62,625 263,800 2,135 414,060 145,500 (42,625) 120,000 (52,000) $ 549,651 $ 482,060 $ 65,141 $ 132,675 72,600 137,741 69,150 201,825 180,750 162,250 55,500 175,660 117,985 $ 549,651 $ 482,060 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 Additional Information on Current Year Transactions a. The loss on the 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. Required: Prepare a complete statement of cash flows using a spreadsheet using the indirect method. Note: Enter all amounts as positive values. Balance sheet-debit Cash Accounts receivable Inventory Prepaid expenses Equipment Balance sheet-credit Accumulated depreciation-Equipment Accounts payable FORTEN COMPANY Spreadsheet for Statement of Cash Flows For Current Year Ended December 31 Long-term notes payable Common stock, $5 par value Paid-in capital in excess of par value, common stock Retained earnings Statement of cash flows Operating activities Net income Increase in accounts receivable Increase in inventory Decrease in accounts payable Decrease in prepaid expenses Depreciation expense Loss on sale of equipment Investing activities Receipt from sale of equipment Payment to purchase equipment Financing activities Payment on long-term notes Analysis of Changes December 31, Prior Year Debit Credit December 31, Current Year S 85,500 $ 67,900 62,625 263,800 2,135 120,000 $ 534,060 $ 67,900 $ 52,000 132,675 69,150 162,250 0 117,985 $ 534,060 Issued common stock for cash Payment of cash dividends Non cash investing and financing activities Purchase of equipment financed by long-term notes payable $ 0 $ 0 $ 0