Problem 12-3A Indirect: Statement of cash flows LO A1, P1, P2, P3 Forten Company, a merchandiser, recently completed its calendar-year 2015 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, 2015 and 2014 2015 2014 Assets 55,684 66,000 Cash Accounts receivable 70,725 55,125 268,906 242,800 Inventory Prepaid expenses 1,360 1,800 396,675 365,725 Total current assets Equipment 150,200 108,000 Accum. depreciation Equipment (41,200) (48,000) 505,675 425,725 Total assets Liabilities and Equity 59,275 109,400 Accounts payable Short-term notes payable 7,600 4,800 Total current liabilities 66,875 114,200 Long-term notes payable 33,775 37,000 Total liabilities 100,650 151,200 Equity Common stock, $5 par value 158,500 147,000 Paid-in capital in excess of par, common stock 34,500 212,025 Retained earnings 127,525 Total liabilities and equity 505,675 425,725