Question
Forten Company's current-year income statement, comparative balance sheets, and additional information follow. Forten Company Income Statement For Current Year Ended December 31 Sales $582,500 Cost
Forten Company's current-year income statement, comparative balance sheets, and additional information follow.
Forten Company Income Statement For Current Year Ended December 31
| Sales | $582,500 | |
| Cost of goods sold | 285,000 | |
| Gross profit | 297,500 | |
| Operating expenses | ||
| Depreciation expense | $20,750 | |
| Other expenses | 132,400 | 153,150 |
| Other gains (losses) | ||
| Loss on sale of equipment | (5,125) | |
| Income before taxes | 139,225 | |
| Income taxes expense | 24,250 | |
| Net income | $114,975 |
Forten Company Comparative Balance Sheets December 31
| Current Year | Prior Year | |
| Assets | ||
| Cash | $49,800 | $73,500 |
| Accounts receivable | 65,810 | 50,625 |
| Inventory | 275,656 | 251,800 |
| Prepaid expenses | 1,250 | 1,875 |
| Total current assets | 392516 | 377,800 |
| Equipment | 157500 | 108,000 |
| Accumulated Depreciation-Equipment | (36,625) | (46,000) |
| Total assets | $513391 | $439,800 |
| Liabilities and Equity | ||
| Accounts payable | $53,141 | $114,675 |
| Short-term notes payable | 10,000 | 6,000 |
| Total current liabilities | 63,141 | 120,675 |
| Long-term notes payable | 65,000 | 48,750 |
| Total liabilities | 128,141 | 169,425 |
| Equity | ||
| Common stock, $5 par value | 162,750 | 150,250 |
| Paid-in-capital in excess of par, common stock | 37,500 | 0 |
| Retained earnings | 185,000 | 120,125 |
| Total liabilities and equity | $513,391 | $439,800 |
Additional information on Current-Year Transactions
a. The loss on the cash sale of equipment was $5,125 (details in b). b. Sold equipment costing $46,875, with accumulated depreciation of $30,125, for $11,625 cash. c. Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term note payable for the balance. d. Borrowed $4,000 cash by signing a short-term note payable. e. Paid $50,125 cash to reduce the long-term notes payable. f. Issued 2,500 share of common stock for $20 cash per share. g. Declared and paid cash dividends of $50,100.
Fill in the blanks below to complete the statement of cash flows for 2019 using the indirect method. The blanks in the left column should have a written description whereas the blanks in the middle and right columns should have a numerical amount. A word bank is provided in a table below the question for both written descriptions and numerical amounts. Please use the exact order that we used in class in the operating section and follow the exact order of the accounts that you use from the balance sheet to the best of your ability; this will prevent items being counted incorrectly that will require later tedious grading for partial credit. In the investing and financing sections, also list items in order of how the accounts appear in the balance sheet with positive changes for that account being listed first, followed by negative changes. Do the best you can with order, and I will correct automatic grading errors where needed.
Do not use dollar signs, commas, or the minus sign in your answers. For negative numbers, you must use parentheses.
Forten Company Statement of Cash Flows For Current Year Ended December 31
| Cash flows from activities | ||
| $ | ||
| Net cash by activities | $ | |
| Cash flows from activities: | ||
| Net cash by activities | ||
| Cash flows from activities: | ||
| Net cash by activities | ||
| Net in cash | $ | |
| Cash balance at December 31, | ||
| Cash balance at December 31, | $ |
Word bank for answering question:
| provided | used | 625 | (625) |
| financing | investing | 4,000 | (4,000) |
| operating | prior year | 5,125 | (5,125) |
| current year | Depreciation expense | 11,625 | (11,625) |
| Loss on sale of equipment | Gain on sale of equipment | 15,185 | (15,185) |
| Net income | Amortization expense | 18,375 | (18,375) |
| Increase in accounts receivable | Decrease in accounts receivable | 20,750 | (20,750) |
| Increase in inventory | Decrease in inventory | 23,700 | (23,700) |
| Increase in prepaid expenses | Decrease in prepaid expenses | 23,856 | (23,856) |
| Increase in accounts payable | Decrease in accounts payable | 30,000 | (30,000) |
| Sale of equipment | Purchase of equipment | 40,900 | (40,900) |
| Borrowings on short-term notes payable | Borrowings on long-term notes payable | 46,225 | (46,225) |
| Payment of short-term notes payable | Payment of long-term notes payable | 49,800 | (49,800) |
| Sale of common stock | Payment of cash dividends | 50,000 | (50,000) |
| increase | decrease | 50,100 | (50,100) |
| 50,125 | (50,125) | ||
| 61,534 | (61,534) | ||
| 73,500 | (73,500) | ||
| 114,975 | (114,975) |
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Authors: Panagiotis Dimitropoulos, Konstantinos Koronios
1st Edition
3030727726, 9783030727727
