purchases of inventory are on credit, and (4) all debits to Accounts Payable reflect cash payments for inventory. FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $ 627,500 Cost of goods sold 294,000 Gross profit Operating expenses (excluding depreciation) $ 141,400 Depreciation expense Other gains (losses) 333,500 29,750 171,150 Loss on sale of equipment (14,125) Income before taxes Income taxes expense Net income Assets FORTEN COMPANY Comparative Balance Sheets December 31 148,225 36,850 $111,375 Current Year Prior Year Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable Total liabilities. Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity Additional Information on Current Year Transactions. $ 63,400 79,360 289,156 $ 82,500 59,625 260,800 1,300 2,075 433,216 405,000 148,500 117,000 (41,125) (50,500) $ 540,591 $ 471,500 $ 62,141 $ 128,175 73,200 135,341 176,250 51,000 178,000 $ 540,591 65,550 193,725 159,250 0 118,525 $ 471,500 Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable Total liabilities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity Additional Information on Current Year Transactions 148,500 (41,125) $ 540,591 117,000 (50,500) $ 471,500 $ 62,141 73,200 $128,175 65,550 135,341 193,725 176,250 159,250 51,000 178,000 118,525 $ 540,591 $ 471,500 a. The loss on the cash sale of equipment was $14,125 (details in b). b. Sold equipment costing $73,875, with accumulated depreciation of $39,125, for $20,625 cash. c. Purchased equipment costing $105,375 by paying $48,000 cash and signing a long-term notes payable for the balance. d. Paid $49,725 cash to reduce the long-term notes payable. e. Issued 3,400 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $51,900. Required: 1. Prepare a complete statement of cash flows using the indirect method for the current year. (Amounts to be deducted should be indicated with a minus sign.)