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 Assets Cash $ 61,900 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 77,850 287,656 $ 81,500 58,625 259,800 1,290 2,055 428,696 401,980 149,500 116,000 (40,625) (50,000) $537,571 $467,980 $ 61,141 $126,675 12,400 7,600 73,541 134,275 61,000 56,750 134,541 191,025 Equity Common stock, $5 par value 174,750 158,250 Paid-in capital in excess of par, common stock. 49,500 0 Retained earnings 178,780 118,705 Total liabilities and equity $537,571 $467,980 FORTEN COMPANY FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income $622,500 293,000 329,500 $ 28,750 140,400 169,150 (13,125) 147,225 35,450 $111,775 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $13,125 (details in b). b. Sold equipment costing $70,875, with accumulated depreciation of $38,125, for $19,625 cash. c. Purchased equipment costing $104,375 by paying $46,000 cash and signing a long-term note payable for the balance. d. Borrowed $4,800 cash by signing a short-term note payable. e. Paid $54,125 cash to reduce the long-term notes payable. f. Issued 3,300 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $51,700. Required: 1. Prepare a complete statement of cash flows using the indirect method for the current year. (Amounts to be deducted should be indicated with a minus sign.) Required: 1. Prepare a complete statement of cash flows using the indirect method for the current year. (Amounts to be deducted should be 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: 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