Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year,...
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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 $ 637,500 Cost of goods sold 296,000 Depreciation expense Loss on sale of equipment Income before taxes Gross profit Operating expenses (excluding depreciation) $ 143,400 Other gains (losses) 341,500 31,750 175,150 (16,125) 150,225 Income taxes expense Net income 39,650 $ 110,575 Assets Cash FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 66,400 82,380 $ 84,500 61,625 262,800 Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable 292,156 1,320 2,115 442,256 411,040 146,500 119,000 (42,125) (51,500) $ 546,631 $ 478,540 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 $ 64,141 $ 131,175 72,800 136,941 67,950 199,125 179,250 161,250 54,000 0 176,440 118,165 $ 546,631 $ 478,540 a. The loss on the cash sale of equipment was $16,125 (details in b). b. Sold equipment costing $79,875, with accumulated depreciation of $41,125, for $22,625 cash. c. Purchased equipment costing $107,375 by paying $52,000 cash and signing a long-term notes payable for the balance. d. Paid $50,525 cash to reduce the long-term notes payable. e. Issued 3,600 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $52,300. 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. Cash flows from operating activities FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Changes in current assets and current liabilities 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 $ 0 0 0 $ 0 $ 0 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 Analysis of Changes December 31, Prior December 31, Year Debit Current Year Credit $ 84,500 61,625 262,800 2,115 119,000 530,040 51,500 131,175 Long-term notes payable 67,950 Common stock, $5 par value 161,250 Paid-in capital in excess of par value, common stock 0 Retained earnings 118,165 530,040 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 0 0 $ 66,400 66,400 0 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 $ 637,500 Cost of goods sold 296,000 Depreciation expense Loss on sale of equipment Income before taxes Gross profit Operating expenses (excluding depreciation) $ 143,400 Other gains (losses) 341,500 31,750 175,150 (16,125) 150,225 Income taxes expense Net income 39,650 $ 110,575 Assets Cash FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 66,400 82,380 $ 84,500 61,625 262,800 Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable 292,156 1,320 2,115 442,256 411,040 146,500 119,000 (42,125) (51,500) $ 546,631 $ 478,540 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 $ 64,141 $ 131,175 72,800 136,941 67,950 199,125 179,250 161,250 54,000 0 176,440 118,165 $ 546,631 $ 478,540 a. The loss on the cash sale of equipment was $16,125 (details in b). b. Sold equipment costing $79,875, with accumulated depreciation of $41,125, for $22,625 cash. c. Purchased equipment costing $107,375 by paying $52,000 cash and signing a long-term notes payable for the balance. d. Paid $50,525 cash to reduce the long-term notes payable. e. Issued 3,600 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $52,300. 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. Cash flows from operating activities FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Changes in current assets and current liabilities 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 $ 0 0 0 $ 0 $ 0 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 Analysis of Changes December 31, Prior December 31, Year Debit Current Year Credit $ 84,500 61,625 262,800 2,115 119,000 530,040 51,500 131,175 Long-term notes payable 67,950 Common stock, $5 par value 161,250 Paid-in capital in excess of par value, common stock 0 Retained earnings 118,165 530,040 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 0 0 $ 66,400 66,400 0
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