Problem 16-5AB Direct: Statement of cash flows @ P5 Refer to Forten Company's financial statements and related information in Problem 16-3A. Required Prepare a complete statement of cash flows using the direct method. Disclose any noncash investing and financing activities in a note. Check Cash used in financing activities, $(46,225) FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $582,500 Cost of goods sold 285,000 Gross profit 297,500 Operating expenses Depreciation expense $ 20,750 Other expenses 132,400 153,150 Other gains (losses) Loss on sale of equipment (5,125) Income before taxes 139,225 Income taxes expense 24,250 Net income $114,975 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year Assets Cash $ 49,800 $ 73,500 Accounts receivable 65,810 50,625 Inventory 275,656 251,800 Prepaid expenses 1,250 1,875 Total current assets 392,516 377,800 157,500 108,000 Equipment Accum. depreciation-Equipment | (36,625) (46,000) Total assets $513,391 $439,800 Liabilities and Equity $ 53,141 $114,675 Accounts payable Short-term notes payable 10,000 6,000 Total current liabilities 63,141 120,675 Long-term notes payable 65,000 48,750 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 0 185,000 120,125 $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