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Required information Use the following information for the Problems below. (Algo) [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 PORTEN COMPANY Income Statement Tor Current Year Ended December 31 Sales $ 672,500 Cost of goods sold 303,000 Gronn profit 369,500 Operating expenson (excluding depreciation) Depreciation expense 38.750 189,150 Other gains (lonnes) LORD on sale of equipment (23, 125) Income before taxes 157,225 Income taxes expense $ 107,775 $ 150,400 49.450 Net Income TORTEN COMPANY Comparative Balance Sheets December 31 Current Year Pelor Year FORTEN COMPANY Comparative Balance Sheeta December 31 Current Year Prior Year Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable Total liabilities Equity Common stock, S5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 76,900 92,950 302,656 1,390 473,896 139,500 (45, 625) $ 567,771 $ 91,500 68,625 269,800 2,255 432,180 126,000 (55,000) $ 503,180 $ 71,141 71,400 142,541 $ 141,675 76,350 218,025 189,750 64,500 170,980 $ 567,771 168,250 0 116,905 $ 503,180 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $23,125 (detalls in b). b. Sold equipment costing $100,875, with accumulated depreciation of $48,125, for $29,625 cash. c. Purchased equipment costing $114,375 by paying $66,000 cash and signing a long-term notes payable for the balance. d. Pald $53,325 cash to reduce the long-term notes payable. e. Issued 4,300 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $53,700. 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 Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Changes in current assets and current liabilities 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, current year
