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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

Required information

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[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 $ 682,500
Cost of goods sold 305,000
Gross profit 377,500
Operating expenses (excluding depreciation) $ 152,400
Depreciation expense 40,750 193,150
Other gains (losses)
Loss on sale of equipment (25,125)
Income before taxes 159,225
Income taxes expense 52,250
Net income $ 106,975
FORTEN COMPANY
Comparative Balance Sheets
December 31
Current Year Prior Year
Assets
Cash $ 79,900 $ 93,500
Accounts receivable 95,970 70,625
Inventory 305,656 271,800
Prepaid expenses 1,410 2,295
Total current assets 482,936 438,220
Equipment 137,500 128,000
Accumulated depreciationEquipment (46,625) (56,000)
Total assets $ 573,811 $ 510,220
Liabilities and Equity
Accounts payable $ 73,141 $ 144,675
Long-term notes payable 71,000 78,750
Total liabilities 144,141 223,425
Equity
Common stock, $5 par value 192,750 170,250
Paid-in capital in excess of par, common stock 67,500 0
Retained earnings 169,420 116,545
Total liabilities and equity $ 573,811 $ 510,220

Additional Information on Current Year Transactions

  1. The loss on the cash sale of equipment was $25,125 (details in b).
  2. Sold equipment costing $106,875, with accumulated depreciation of $50,125, for $31,625 cash.
  3. Purchased equipment costing $116,375 by paying $70,000 cash and signing a long-term notes payable for the balance.
  4. Paid $54,125 cash to reduce the long-term notes payable.
  5. Issued 4,500 shares of common stock for $20 cash per share.
  6. Declared and paid cash dividends of $54,100.

Required:

1. Prepare a complete statement of cash flows using the indirect method for the current year.

Note: Amounts to be deducted should be indicated with a minus sign.

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