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, and (4) all debits to Accounts Payable reflect cash payments for inventory. Sales Cost of goods sold i 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 $ 602,500 289,000 313,500. $136,400 24,750 161,150 (9,125) 143,225 29,850 $113,375 FORTEN COMPANY Comparative Balance Sheets Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable December 31 Current Year Prior Year $ 55,900 71,810 $ 77,500 54,625 255,800 281,656 1,250 1,975 410,616 389,900 112,000 (48,000) 153,500 (38,625) $ 525,491 $ 57,141 $ 453,900 Total liabilities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock) Retained earnings Total liabilities and equity Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $9.125 (details in b) $ 120,675 74,200 59,550 131,341 180,225 168,750 154,250 43,500 0 181,900 119,425 $ 525,491 $ 453,900 b. Sold equipment costing $58,875, with accumulated depreciation of $34,125, for $15,625 cash. c. Purchased equipment costing $100.375 by paying $38,000 cash and signing a long-term notes payable for the balance. d. Paid $47,725 cash to reduce the long-term notes payable, e. Issued 2.900 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $50,900. Required information Cash flows from operating activities 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 $ 0 0 Balance sheet-debit Cash Accounts receivable" Inventory Prepaid expenses Equipment Balance sheet-credit Accumulated depreciation-Equipment Accounts payable FORTEN COMPANY Spreadsheet for Statement of Cash Flows For Current Year Ended December 31 December 31, Prior Year Long-term notes payable Common stock, $5 par value Paid in capital in excess of par value, common stock Retained earnings Statement of cash flows Operating activities $ 77,500 54,625 255,800 1,975 Analysis of Changes December 31, Debit Credit Current Year $ 55,900 112,000 S 501,900 S 55,900 $ 48,000 120,675 59,550 154,250 0 119,425 S 501,900 < Prev B of 4 Next Operating activities Investing activities Financing activities Non cash investing and financing activities Purchase of equipment financed by long-term notes payable $ 0 $