Indirect: Statement of cash flows A1 P2 P3 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. Accounts receivable Inventory FORTEN COMPANY Income Statement FORTEN COMPANY Comparative Balance Sheets For Current Year Ended December 31 At December 31 Current Year Prior Year Sales $582,500 Assets Cost of goods sold 285,000 Cash. $ 49,000 Gross profit.. 297,500 65,810 $ 73,500 50,625 Operating expenses (excluding depreciation).. $132,400 275,656 Depreciation expense 20,750 153,150 Prepaid expenses Other gains (losses) Total current assets.. 1,250 392516 251,800 1,875 377,800 Loss on sale of equipment.. (5.125) Equipment 157,500 108,000 Income before taxas... 139.225 Accum, depreciation Equipment 36,625) 146,000 Income taxes expense Not Income.. 24,250 $114.975 Total $513,391 $439,800 Liabilities and Equity Accounts payable $ 53,141 Long-term notes payable Total liabilities.. 75,000 128,141 $114,675 54,750 169,425 162,750 150,250 37,500 185,000 120,125 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 $11,675 cash. c. Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term notes payable for the balance. d. Paid $46,125 cash to reduce the long-term notes payable. e. Issued 2,500 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $50,100 Required 1. Equity Common stock, $5 per value Paid-in capital in excess of par, common stock. Retained eamings... Total liabilities and equity.. $513,391 $439,800 Prepare a complete statement of cash flows using the indirect method for the current year. Disclose any noncash investing and financing activities in a note. Check Cash from operating activities, $40,900 Analysis Component 2. Analyze and discuss the statement of cash flows prepared in part 1, giving special attention to the wisdom of the cash dividend payment