prob 1

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 alt 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 5632,500 Cost of goods sold 295.000 Gross profit 337,500 Operating expenses (excluding depreciation) $ 142,400 Depreciation expense 30,750 173, 150 Other gains (losses) 105, 125 LOSS on sale of equipment 149, 225 Income before taxes 33,250 Income taxes expense $ 110,975 Net Income FORTEN COMPANY Comparative Balance Sheets Ow 5TH Nov Current Year Prior Year FORTEN COMPANY Comparative Balance Sheets December 31 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum depreciation-Equipment Total assets Liabilities and Equity Accounts payable Short-tern notes payable Total current liabilities Long-term notes payable Total abilities Equity Coron stock, 55 par Value Poid-in capital in exces of a common stock Retained earnings Total stabilities and equity $ 54,900 5,870 299,656 1,310 437,7M 147,500 (41.625 5 543,611 $ 83.500 50,625 261,500 2.035 400,020 110,000 (51.000 $475,020 $ 63,147 19.000 76,141 60. 136,141 $ 119,95 0 137.679 116, 177,250 160,250 377 $ 54).611 $475,000 Additional Information on Current Year Transactions Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $15,125 (details in b). b. Sold equipment costing $76,875, with accumulated depreciation of $40,125, for $21.625 cash c. Purchased equipment costing $106,375 by paying $50,000 cash and signing a long-term note payable for the balance d. Borrowed $5,000 cash by signing a short-term note payable. e. Paid $55,125 cash to reduce the long-term notes payable f. Issued 3,500 shares of common stock for $20 cash per share g. Declared and paid cash dividends of $52,100. Problem 12-3A (Algo) Indirect: Statement of cash flows LO A1, P2, P3 Required: 1. Prepare a complete statement of cash flows using the activect method for the current year. (Amounts to be deducted should be indicated with a minus sign.) ADANY . Required information 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 es Changes in current assets and current liabilities Cash flows from investing activities ! Required information Cash flows from investing activities es Cash flows from financing activities: Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year