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Required information Skip to question [The following information applies to the questions displayed below.] 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 $ 592,500 Cost of goods sold 287,000 Gross profit 305,500 Operating expenses (excluding depreciation) $ 134,400 Depreciation expense 22,750 157,150 Other gains (losses) Loss on sale of equipment (7,125) Income before taxes 141,225 Income taxes expense 27,050 Net income $ 114,175 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year Assets Cash $ 52,900 $ 75,500 Accounts receivable 68,810 52,625 Inventory 278,656 253,800 Prepaid expenses 1,270 1,995 Total current assets 401,636 383,920 Equipment 155,500 110,000 Accumulated depreciationEquipment (37,625) (47,000) Total assets $ 519,511 $ 446,920 Liabilities and Equity Accounts payable $ 55,141 $ 117,675 Long-term notes payable 74,600 57,150 Total liabilities 129,741 174,825 Equity Common stock, $5 par value 165,750 152,250 Paid-in capital in excess of par, common stock 40,500 0 Retained earnings 183,520 119,845 Total liabilities and equity $ 519,511 $ 446,920 Additional Information on Current Year Transactions The loss on the cash sale of equipment was $7,125 (details in b). Sold equipment costing $52,875, with accumulated depreciation of $32,125, for $13,625 cash. Purchased equipment costing $98,375 by paying $34,000 cash and signing a long-term notes payable for the balance. Paid $46,925 cash to reduce the long-term notes payable. Issued 2,700 shares of common stock for $20 cash per share. Declared and paid cash dividends of $50,500. 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
Net income
Adjustments to reconcile net income to net cash provided by operations:
Income statement items not affecting cash
Depreciation expense
Increase in accounts receivable
Changes in current assets and current liabilities
Increase in inventory
Increase in paid expenses
Decrease in accounts payable
Loss on disposal of equipment
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, currentyear