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 company's income statement and balance sheets follow. PORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2012 67.900 83.890 293,656 1.330 446,776 145,500 (42.625) $549.651 $ 85,500 62,625 263.800 2.135 414060 120,000 (52,000) $482,060 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 Connon stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity $132.675 65,141 13,600 1400 59.000 137.741 185,250 49.500 175.560 $549,651 $482,060 PORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold 5642,500 297,000 $642,500 297,000 345.500 $ 32,750 144.400 177,150 Coat of goods sold Cross profit Operating expenses Depreciation expense Other expenses Other gains (losses) Toss on sale of equipment Income before taxes Income taxes expense Net Income (17.125) 151,225 41.050 $110, 175 Additional Information on Year 2017 Transactions a. The loss on the cash sale of equipment was $17,125 (details in b). b. Sold equipment costing $82,875, with accumulated depreciation of $42,125, for $23,625 cash. c. Purchased equipment costing $108,375 by paying $54,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,200 cash by signing a short-term note payable. e. Paid $56,125 cash to reduce the long-term notes payable. f. Issued 3,700 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $52,500 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.) 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 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
