quired to [The following information applies to the questions displayed below.) Forten Company, a merchandiser, recently completed its calendar-year 2017 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, 2017 and 2016 2017 2016 Assets Cash $ 63,400 $ 82,500 Accounts receivable 79,360 59,625 Inventory 289, 156 260,800 Prepaid expenses 1,300 2, 075 Total current assets 433,216 405,000 Equipment 148,500 117,000 Accum. depreciation-Equipment (41, 125) (50,500) Total assets $540,591 $471,500 Liabilities and Equity Accounts payable $ 62,141 $128, 175 Short-term notes payable 12,700 7,800 Total current liabilities 74,841 135,975 Long-term notes payable 60,500 57,750 Total liabilities 135,341 193,725 Equity Common stock, $5 par value 180,750 159, 250 Paid-in capital in excess of par, common stock 46,500 Retained earnings 178,000 118,525 Total liabilities and equity $540,591 $471,500 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales $627,500 Cost of goods sold 294,000 Gross profit 333,500 Operating expenses Depreciation expense$ 29,750 Other expenses 141,400 171, 150 Other gains (losses) Loss on sale of equipment (14, 125) Income before taxes 148,225 Income taxes expense 36,850 Net income $111,375 Additional Information on Year 2017 Transactions a. The loss on the cash sale of equipment was $14,125 (details in bl. 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 note payable for the balance. d. Borrowed $4,900 cash by signing a short-term note payable. e. Paid $54,625 cash to reduce the long-term notes payable. f. Issued 3.400 shares of common stock for $20 cash per share. 9. Declared and paid cash dividends of $51,900. Required: 1. Prepare a complete statement of cash flows; report its operating activities using the indirect method (Amounts to be deducted should be indicated with a minus sign.) FORTEN COMPANY Statement of Cash Flows For Year Ended December 31, 2017 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operations: Cash flows from investing activities Cash flows from financing activities: Net increase (decrease in cash Cash balance at beginning of year Cash balance at end of year
