Problem 16-3A Indirect: Statement of cash flows UA1 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 Sales $582,500 285,000 297,500 Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Other gains (losses) Loss on sale of equipment $ 20,750 132,400 153,150 (5,125) Income before taxes 139,225 Income taxes expense 24,250 $114,975 Net income Comparative Balance Sheets December 31 Current Year Prior Year Assets Cash $ 49,800 65,810 Accounts receivable $ 73,500 50,625 251,800 275,656 Inventory Prepaid expenses Total current assets 1,250 1,875 392,516 377,800 157,500 Equipment Accum. depreciation Equipment (36,625) 108,000 (46,000) $439,800 Total assets $513,391 $ 53,141 Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities 10,000 $114,675 6,000 120,675 48,750 63,141 65,000 Long-term notes payab Total liabilities 128,141 169,425 162,750 150,250 Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity 37,500 o 185,000 120,125 $513,391 $439,800 Additional Information 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