Problem 12-3A Indirect: Statement of cash flows LO A1, P1, P2, P3

Additional Information on Year 2018 Transactions

The loss on the cash sale of equipment was $10,125 (details in b).

Sold equipment costing $61,875, with accumulated depreciation of $35,125, for $16,625 cash.

Purchased equipment costing $101,375 by paying $40,000 cash and signing a long-term note payable for the balance.

Borrowed $4,500 cash by signing a short-term note payable.

Paid $52,625 cash to reduce the long-term notes payable.

Issued 3,000 shares of common stock for $20 cash per share.

Declared and paid cash dividends of $51,100.

Required: 1. Prepare a complete statement of cash flows; report its operating activities using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

FORTEN COMPANY Comparative Balance Sheets December 31, 2018 and 2017 2018 2017 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets 57,400 78,500 55, 625 256,800 1,995 392,920 113,000 (48,500 $528,511 $457,420 73,320 283,156 1,260 415, 136 152,500 (39,125) Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term notes payable Total liabilities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings 58,141 $122,175 7,000 129,175 62,50053,750 182,925 11,500 69,641 132,141 172,750 157,750 45,000 178,620 116,745 $528,511 $457,420 Total liabilities and equity FORTEN COMPANY Income Statement For Year Ended December 31, 2018 Sales Cost of goods sold Gross profit Operating expenses $607,500 290,000 317,500 Depreciation expense $ 25,750 137,400163,150 other expenses other gains (losses) (10,125 144,225 31,250 $112,975 Loss on sale of equipment Income before taxes Income taxes expense Net income