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. Prior Year FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Assets Cash $ 73,900 Accounts receivable 89,938 Inventory 299,656 Prepaid expenses 1,370 Total current assets 464,856 Equipment 141,500 Accum. depreciation-Equipment (44,625) Total assets $561,731 Liabilities and Equity Accounts payable $ 69,141 Short-term notes payable 14,800 Total current liabilities 83,941 Long-term notes payable 57,880 Total liabilities 148,941 Equity Common stock, $5 par value 186,75 Paid-in capital in excess of par, common stock 61,500 Retained earnings 172,540 Total liabilities and equity $561,731 $ 89,500 66,625 267,800 2,215 426,140 124, eee (54, eee) $496,140 $138,675 9, 200 147,875 64,750 212,625 166,250 @ 117,265 $496,140 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $662,500 Cost of goods sold 3e1,800 Gross profit 361,500 Operating expenses Depreciation expense $ 36,750 other expenses 148,400 185,150 Other gains (losses) Loss on sale of equipment (21,125) Income before taxes 155, 225 Income taxes expense 46,650 Net income $108,575 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $21,125 (details in b). b. Sold equipment costing $94,875, with accumulated depreciation of $46,125, for $27,625 cash. c. Purchased equipment costing $112,375 by paying $62,000 cash and signing a long-term note payable for the balance. This window shows your responses Income before taxes Income taxes expense Net income 155, 225 46,650 $108,575 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $21,125 (details in b). b. Sold equipment costing $94.875, with accumulated depreciation of $46,125, for $27,625 cash. c. Purchased equipment costing $112,375 by paying $62,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,600 cash by signing a short-term note payable. e. Paid $58,125 cash to reduce the long-term notes payable. f. Issued 4,100 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $53,300. 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 108,575 Adjustments to reconcile net income to net cash provided by operations OOOOOO OOOOOO 5 108,575 Cash flows from investing activities oo Cash flows from francing activities X OOO > OOO > 0 Not increase (decrease in cash 108,575 Cance December 31, prior you Cash balance December 31, current year $ 108,57 "Red best indicates no response was expected in a call or a formulia-based calculation is incorrect, no points deducted
