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				$	672,500
Cost of goods sold					303,000
Gross profit					369,500
Operating expenses (excluding depreciation)	$	150,400
Depreciation expense		38,750			189,150
Other gains (losses)
Loss on sale of equipment					(23,125	)
Income before taxes					157,225
Income taxes expense					49,450
Net income				$	107,775

FORTEN COMPANY Comparative Balance Sheets December 31
	Current Year						Prior Year
Assets
Cash		$	76,900					$	91,500
Accounts receivable			92,950						68,625
Inventory			302,656						269,800
Prepaid expenses			1,390						2,255
Total current assets			473,896						432,180
Equipment			139,500						126,000
Accum. depreciationEquipment			(45,625	)					(55,000	)
Total assets		$	567,771					$	503,180
Liabilities and Equity
Accounts payable		$	71,141					$	141,675
Short-term notes payable			15,400						9,600
Total current liabilities			86,541						151,275
Long-term notes payable			56,000						66,750
Total liabilities			142,541						218,025
Equity
Common stock, $5 par value			189,750						168,250
Paid-in capital in excess of par, common stock			64,500						0
Retained earnings			170,980						116,905
Total liabilities and equity		$	567,771					$	503,180

Additional Information on Current Year Transactions

1. The loss on the cash sale of equipment was $23,125 (details in b).
2. Sold equipment costing $100,875, with accumulated depreciation of $48,125, for $29,625 cash.
3. Purchased equipment costing $114,375 by paying $66,000 cash and signing a long-term note payable for the balance.
4. Borrowed $5,800 cash by signing a short-term note payable.
5. Paid $59,125 cash to reduce the long-term notes payable.
6. Issued 4,300 shares of common stock for $20 cash per share.
7. Declared and paid cash dividends of $53,700.

Answer is not complete. FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Net income $ 107,775 Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Depreciation expense 38,750 Changes in current assets and current liabilities Loss on disposal of equipment Increase in accounts receivable 23,125 X (24,325) (32,856) 865 Increase in inventory Decrease in prepaid expenses Decrease in accounts payable (70,534) $ 42,800 $ 42,800 Cash flows from investing activities Cash received from sale of equipment Cash paid for equipment 29,625 (66,000) (36,375) Cash flows from financing activities: Cash borrowed on short-term note Cash paid on long-term note Cash received from issuing stock Cash paid for dividends 5,800 (59,125) 86,000 (53,700) (21,025) (14,600) $ 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 $ (14,600)