Required information [The following information applies to the questions displayed below] Forten Company's current year income statement, comparative balance sheets, and add year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash recei purchases of inventory are on credit, and (4) all debits to Accounts Payable reflect cash Sales Cost of goods sold Gross profit FORTEN COMPANY Income Statement For Current Year Ended December 31 Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income $ 617,500 292,000 325,500 $ 139,400 27,750 167,150 (12,125) 146,225 34,050 $ 112,175 Assets Cash FORTEN COMPANY Comparative Balance Sheets December 31 Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable Total liabilities Equity Current Year Prior Year $ 60,400 76,340 286,156 $ 80,500 57,625 258,800 1,280 2,035 424,176 150,500 398,960 (40,125) $ 534,551 $ 60,141 73,600 133,741 115,000 (49,500) $ 464,460 $ 125,175 63,150 188,325 157,250 0 Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity 173,250 48,000 179,560 $ 534,551 118,885 $ 464,460 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $12,125 (details in b). b. Sold equipment costing $67,875, with accumulated depreciation of $37,125, for $18,625 cash. c. Purchased equipment costing $103,375 by paying $44,000 cash and signing a long-term notes balance. d. Paid $48,925 cash to reduce the long-term notes payable. e. Issued 3,200 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $51,500. uired: repare a complete statement of cash flows using the indirect method for the current year. (Amounts cated with a minus sign.) Cash flows from operating activities Net income FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Changes in current assets and current liabilities Cash flows from investing activities Cash flows from financing activities: Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year S S