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Forten Company, a merchandiser, recently completed its calendar year 2017 operations. 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, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's income statement and balance sheets follow FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation Equipment Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term notes payable Total liabilities Equity Common stock, 55 par value Paid-in capital in excess of par, common stock $ 49,800 65,810 275,656 1,250 392,516 157,500 (36,625) $513,391 $ 73,500 50,625 251,800 1,875 377,800 108,000 (46,000) $439,800 $ 53,141 10,000 63,141 65,000 128,141 $114,675 6,000 120,675 48,750 169,425 150, 250 162,750 37,500 10E $513,391 $439,800 Total liabilities and equity points eBook Print FORTEN COMPANY Income Statement For Year Ended December 31, 2017 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 References Problem 12-3A Indirect: Statement of cash flows LO A1, P1, P2, P3 Additional Information on Year 2017 Transactions a. The loss on the cash sale of equipment was $5,125 (details in 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 ba SOURI Deluila WUR oints eBook Print References FORTEN COMPANY Statement of Cash Flows For Year Ended December 31, 2017 Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operations: Cash paid on long term note Depreciation expense Loss on disposal of equipment Income taxes payable increase Inventory increase Depreciation expense Income taxes payable decrease Net cash provided by operating activities Cash flows from Investing activities Required information Income taxes payable decrease Net cash provided by operating activities Cash flows from investing activities Cash flows from financing activities: Net increase (decrease) in cash Cash balance at beginning of year Cash balance at end of year OL Forten Company, a merchandiser, recently completed its calendar year 2017 operations. 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, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's income statement and balance sheets follow FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation Equipment Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term notes payable Total liabilities Equity Common stock, 55 par value Paid-in capital in excess of par, common stock $ 49,800 65,810 275,656 1,250 392,516 157,500 (36,625) $513,391 $ 73,500 50,625 251,800 1,875 377,800 108,000 (46,000) $439,800 $ 53,141 10,000 63,141 65,000 128,141 $114,675 6,000 120,675 48,750 169,425 150, 250 162,750 37,500 10E $513,391 $439,800 Total liabilities and equity points eBook Print FORTEN COMPANY Income Statement For Year Ended December 31, 2017 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 References Problem 12-3A Indirect: Statement of cash flows LO A1, P1, P2, P3 Additional Information on Year 2017 Transactions a. The loss on the cash sale of equipment was $5,125 (details in 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 ba SOURI Deluila WUR oints eBook Print References FORTEN COMPANY Statement of Cash Flows For Year Ended December 31, 2017 Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operations: Cash paid on long term note Depreciation expense Loss on disposal of equipment Income taxes payable increase Inventory increase Depreciation expense Income taxes payable decrease Net cash provided by operating activities Cash flows from Investing activities Required information Income taxes payable decrease Net cash provided by operating activities Cash flows from investing activities Cash flows from financing activities: Net increase (decrease) in cash Cash balance at beginning of year Cash balance at end of year OL
