Problem 12-3A (Algo) Indirect: Statement of cash flows

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. $ 677,500 304,000 373,500 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) $ 151,400 Depreciation expense 39,750 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 191,15 (24, 125) 158, 225 50,850 $ 107, 375 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 78,400 94,460 304,156 1,400 478,416 138,500 (46,125) $ 570,791 $ 92,500 69,625 270, 800 2,275 435,200 127,000 (55,500) $ 506,700 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, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 72,141 71,200 143,341 $ 143, 175 77,550 220,725 169,250 191,250 66,000 170, 200 $570,791 116,725 $ 506,700 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $24,125 (details in b). b. Sold equipment costing $103,875, with accumulated depreciation of $49,125, for $30,625 cash. c. Purchased equipment costing $115,375 by paying $68,000 cash and signing a long-term notes payable for the balance. d. Paid $53.725 cash to reduce the long-term notes payable. e. Issued 4,400 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $53,900. Problem 12-3A (Algo) Indirect: Statement of cash flows LO A1, P2, P3 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 ! Required information 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