Hook Orten Company's current year income statement, comparative lance sheets, and additional information follow. For the year. (1) all iles are credit sales, (2) all credits to Accounts Receivable reflect ish receipts from customers, (3) all purchases of inventory are on edit and (4) all debits to Accounts Payable reflect cash payments rinventory FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) $ 147,400 Depreciation expense 35,750 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income int $ 657,500 300,000 357,500 inces 183,150 (20,125) 154,225 45,250 $ 108,975 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 72,400 88,420 298,156 1,360 460, 336 142,500 (44, 125) $ 558,711 $ 88,500 65,625 266,800 2,195 423, 120 123,000 (53,500) $ 492,620 Assets Cash Accounts receivable Inventory Prepaid expenses Total current asses Equipment Accumulated depreciation Equipment Total assets liabilities and Equity Accounts payable 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 $ 68,1411 72,000 140, 141 137, 175 72,750 209,925 185,250 60,000 173,320 $ 558,711 165,250 0 117,445 $ 492,620 dditional Information on Current Year Transactions The loss on the cash sale of equipment was $20,125 (details in b). Sold equipment costing $91,875, with accumulated depreciation of $45,125, for $26,625 cash 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 $ 108.975 35,750 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 Loss on disposal of equipment Changes in current assets and current liabilities Increase in accounts receivable Increase in inventory Decrease in prepaid expenses Decrease in accounts payable $ Cas' flows from investing activities Cash received from sale of equipment Cash paid for equipment Cash flows from financing activities: Cash borrowed on short-term note Cash paid on long-term notes Cash received from issuing stock Cash paid for dividends Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $ Hook Orten Company's current year income statement, comparative lance sheets, and additional information follow. For the year. (1) all iles are credit sales, (2) all credits to Accounts Receivable reflect ish receipts from customers, (3) all purchases of inventory are on edit and (4) all debits to Accounts Payable reflect cash payments rinventory FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) $ 147,400 Depreciation expense 35,750 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income int $ 657,500 300,000 357,500 inces 183,150 (20,125) 154,225 45,250 $ 108,975 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 72,400 88,420 298,156 1,360 460, 336 142,500 (44, 125) $ 558,711 $ 88,500 65,625 266,800 2,195 423, 120 123,000 (53,500) $ 492,620 Assets Cash Accounts receivable Inventory Prepaid expenses Total current asses Equipment Accumulated depreciation Equipment Total assets liabilities and Equity Accounts payable 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 $ 68,1411 72,000 140, 141 137, 175 72,750 209,925 185,250 60,000 173,320 $ 558,711 165,250 0 117,445 $ 492,620 dditional Information on Current Year Transactions The loss on the cash sale of equipment was $20,125 (details in b). Sold equipment costing $91,875, with accumulated depreciation of $45,125, for $26,625 cash 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 $ 108.975 35,750 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 Loss on disposal of equipment Changes in current assets and current liabilities Increase in accounts receivable Increase in inventory Decrease in prepaid expenses Decrease in accounts payable $ Cas' flows from investing activities Cash received from sale of equipment Cash paid for equipment Cash flows from financing activities: Cash borrowed on short-term note Cash paid on long-term notes Cash received from issuing stock Cash paid for dividends Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $