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Required information [The following information applies to the questions displayed below.] Forten Company, a merchandiser, recently completed its calendar-year 2017 operations. For the year, (1)

Required information

[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 companys income statement and balance sheets follow.

FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016
2017 2016
Assets
Cash $ 52,900 $ 75,500
Accounts receivable 68,810 52,625
Inventory 278,656 253,800
Prepaid expenses 1,270 1,995
Total current assets 401,636 383,920
Equipment 155,500 110,000
Accum. depreciationEquipment (37,625 ) (47,000 )
Total assets $ 519,511 $ 446,920
Liabilities and Equity
Accounts payable $ 55,141 $ 117,675
Short-term notes payable 10,600 6,400
Total current liabilities 65,741 124,075
Long-term notes payable 64,000 50,750
Total liabilities 129,741 174,825
Equity
Common stock, $5 par value 166,750 152,250
Paid-in capital in excess of par, common stock 39,500 0
Retained earnings 183,520 119,845
Total liabilities and equity $ 519,511 $ 446,920

FORTEN COMPANY Income Statement For Year Ended December 31, 2017
Sales $ 592,500
Cost of goods sold 287,000
Gross profit 305,500
Operating expenses
Depreciation expense $ 22,750
Other expenses 134,400 157,150
Other gains (losses)
Loss on sale of equipment (7,125 )
Income before taxes 141,225
Income taxes expense 27,050
Net income $ 114,175

Additional Information on Year 2017 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 note payable for the balance.

Borrowed $4,200 cash by signing a short-term note payable.

Paid $51,125 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: 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.)

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