Problem 16-3A Indirect: Statement of cash flows A1 P2 P3 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, (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. FORTEN COMPANY Income Statement For Current Year Ended December 31 Assets Cashi Accounts receivable Inventory Prepaid expenses Additional Information FORTEN COMPANY Comparative Balance Sheets. December 31 Current Year Prior Year $ 49.800 65,810 $ 73,500 50,625 275,656 251,800 1,250 1,875 Total current assets 392,516 377.800 Equipment 157,500 108,000 $582,500 Accum. depreciation-Equipment (36,625) (46,000) 285,000. Total assets $513.391 $439,800 297,500 Liabilities and Equity Accounts payable S 53.141 $114.675 Short-term notes payable 10,000 6,000 (5,125) 139,225 Total current liabilities 63,141 120,675 24,250 $114,975 Long-term notes payable Total liabilities Equity Common stock, $5 par value 162,750) 150,250 Paid-in capital in excess of par, common stock 37.500 0 Retained earnings 185,000 120,125 Total liabilities and equity $513,391 $439,800 65,000 48,750 128,141 169,425 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $20,750 Other expenses 132,400 153,150 Other gains (losses) Loss on sale of equipment Income before taxes. Income taxes expense Net income a. The loss on the cash sale of equipment was $5,125 (details in b). b. Sold equipment costing $46,875, with accumulated depreciation of $30,125, for $11,625 cash. c. Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term note payable for the balance. d. Borrowed $4,000 cash by signing a short-term note payable. e. Paid $50,125 cash to reduce the long-term notes payable. f. Issued 2,500 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $50,100. Page 605 Required 1. Prepare a complete statement of cash flows using the indirect method for the current year. Disclose any noncash investing and financing activities in a note. Check Cash from operating activities, $40,900 Create Journal Entries & TAle for the Additional info.