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 Recelvable 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 $ 612, see Cost of goods sold 291, eee Gross profit 321, 5ee Operating expenses (excluding depreciation) $ 138,400 Depreciation expense 26,75e 165, 15e Other gains (losses) Loss on sale of equipment (11,125) Income before taxes 145, 225 Income taxes expense 32,650 Net income $ 112,575 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 58,988 74,838 284,656 1,278 419,656 151,500 (39,625) $ 531,531 $ 79,5ee 56,625 257, see 2,015 395, 940 114, eee (49, eee) 460, 940 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, ss par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 59,141 73,8ee 132,941 $ 123,675 61,950 185,625 156,25e 171,750 46,5ee 180, 340 $ 531,531 119,865 $ 460,940 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $11,125 (detalls in b). b. Sold equipment costing $64.875, with accumulated depreciation of $36,125, for $17,625 cash. c. Purchased equipment costing $102,375 by paying S42,000 cash and signing a long-term notes payable for the balance. d. Pald $48,525 cash to reduce the long-term notes payable. e. Issued 3,100 shares of common stock for $20 cash per share. 1. Declared and pald cash dividends of $51,300. equired into tion Spreadsheet for Statement of Cash Flows For Current Year Ended December 31 December 31, Prior Analysis of Changes Year Debit Credit December 31 Current Year Balance sheet-debit $ $ 58.900 Cash Accounts receivable 79.500 58.825 Inventory Prepaid expenses Equipment 257.800 2.015 114.000 500.040 $ $ Balance sheet-credit Accumulated depreciation-Equipment Accounts payable Long-term notes payable Common stock, 55 par value Paid-in capital in excess of par value, common stock Retained earnings 40.000 123.675 61.950 150.250 0 119,085 509.040 $ Statement of cash flows Operating activities Investing activities Financing activities Non cash investing and financing activities Purchase of equipment financed by long-term notes payable FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating 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
