Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Required information [The following information applies to the questions displayed below.] Forten Company's current year income statement, comparative balance sheets, and additional information follow. For

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

Required information [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, (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, FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 69,400 85,400 295,156 1,340 451,296 144,500 (43, 125) $ 552,671 $ 86,500 63,625 264,800 2,155 417,080 121,000 (52,500) $ 485,580 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities 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 $ 66,141 13,900 80, 041 58,500 138,541 $ 134, 175 8,600 142,775 61,750 204,525 163,250 182,250 57,000 174,880 $ 552,671 117,805 $ 485,589 $ 647,500 298,000 349,500 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 33,750 Other expenses 145,400 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 179, 150 (18,125) 152, 225 42,450 $ 109,775 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $18,125 (details in b). b. Sold equipment costing $85,875, with accumulated depreciation of $43,125, for $24,625 c. Purchased equipment costing $109,375 by paying $56,000 cash and signing a long-term d. Borrowed $5,300 cash by signing a short-term note payable. e. Paid $56,625 cash to reduce the long-term notes payable. f. Issued 3,800 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $52,700. 48 Required: 1. Prepare a complete statement of cash flows using the Indirect method for the current year. (Amounts to be deducted indicated with a minus sign.) FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operations: $ 0 Cash flows from investing activities ! Required information $ 0 Cash flows from investing activities 0 Cash flows from financing activities: 0 0 $ Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $ 0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Local Union Financial Records A Guide For Local Union Trustees

Authors: John Lund

1st Edition

0875461948, 978-0875461946

More Books

Students also viewed these Accounting questions

Question

Different kinds of productive and nonproductive roles in teams.

Answered: 1 week ago