Required information

Skip to question

$[$The following information applies to the questions displayed below.$]$

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, and $(4)$ all debits to Accounts Payable reflect cash payments for inventory.

FORTEN COMPANY

Income Statement

For Current Year Ended December $31$

Sales $ $592,500$

Cost of goods sold $287,000$

Gross profit $305,500$

Operating expenses $($excluding depreciation$)$ $ $134,400$

Depreciation expense $22,750157,150$

Other gains $($losses$)$

Loss on sale of equipment $(7,125)$

Income before taxes $141,225$

Income taxes expense $27,050$

Net income $ $114,175$

FORTEN COMPANY

Comparative Balance Sheets

December $31$

Current Year Prior Year

Assets

Cash $ $52,900$ $ $75,500$

Accounts receivable $68,81052,625$

Inventory $278,656253,800$

Prepaid expenses $1,2701,995$

Total current assets $401,636383,920$

Equipment $155,500110,000$

Accumulated depreciation$$Equipment $(37,625)(47,000)$

Total assets $ $519,511$ $ $446,920$

Liabilities and Equity

Accounts payable $ $55,141$ $ $117,675$

Long$-$term notes payable $74,60057,150$

Total liabilities $129,741174,825$

Equity

Common stock, $$5$ par value $165,750152,250$

Paid$-$in capital in excess of par, common stock $40,5000$

Retained earnings $183,520119,845$

Total liabilities and equity $ $519,511$ $ $446,920$

Additional Information on Current Year Transactions

The loss on the cash sale of equipment was $$7,125($details in b$).$

Sold equipment costing $$52,875,$ with accumulated depreciation of $$32,125,$ for $$13,625$ cash.

Purchased equipment costing $$98,375$ by paying $$34,000$ cash and signing a long$-$term notes payable for the balance.

Paid $$46,925$ cash to reduce the long$-$term notes payable.

Issued $2,700$ shares of common stock for $$20$ cash per share.

Declared and paid cash dividends of $$50,500.$

Required:

Prepare a complete statement of cash flows using a spreadsheet using the indirect method.

Note: Enter all amounts as positive values.