Problem 16-3A 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 Cash Accounts receivable Inventory Prepaid expenses $ 52,779 70,025 269,656 1,340 $ 65,500 54,625 243,800 1,775 Total current assets Equipment Accum. depreciation Equipment 393,800 149,175 (40,150) 365,700 107,000 (47,000) Total assets $ 502,825 $ 425,700 Liabilities and Equity Accounts payable Short-term notes payable $ 59,375 7,400 $ 109,250 4,700 Total current liabilities Long-term notes payable 66,775 34,325 113,950 36,500 101,100 150,450 Total liabilities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings 157,750 33,000 210,975 146,750 0 128,500 Total liabilities and equity $ 502,825 $ 425,700