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) al 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 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets $ 72,400 88,420 298,156 1,360 460,336 142,500 44,125 $ 88,500 65,625 266,800 2,195 423,120 123,000 (53,500 $492,620 $558,711 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 $ 68,141 14.500 82,641 57,500 140,14.1 $137,175 9,000 146,17!5 63,750 209,925 185,250 60,000 173,320 $558,711 165,250 117,445 $492,620 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses $657,500 300,000 357,500 Depreciation expense $ 35,750 Other expenses 147,400 183,150 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income (20,125) 154,225 45,250 $108,975 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $20,125 (details in b) b. Sold equipment costing $91,875, with accumulated depreciation of $45,125, for $26,625 cash c. Purchased equipment costing $111,375 by paying $60,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,500 cash by signing a short-term note payable e. Paid $57,625 cash to reduce the long-term notes payable f. Issued 4,000 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $53,100 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