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. FORTEN COMPANY Income Statement For Current Year Ended December 31. Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) $ 134,400 Depreciation expense Other gains (losses) $ 592,500 287,000 305,500 22,750 157,150 Loss on sale of equipment Income before taxes (7,125) Income taxes expense Net income 141,225 27,050 $ 114,175 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 52,900 68,810 278,656 1,270 401,636 155,500 (37,625) $ 519,511 $ 55,141 74,600 129,741 165,750 $ 75,500 52,625 253,800 1,995 383,920 110,000 (47,000) $ 446,920 $ 117,675 57,150 174,825 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 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 152,250 40,500 0 183,520 119,845 $ 519,511 $ 446,920 a. The loss on the cash sale of equipment was $7,125 (details in b). b. Sold equipment costing $52,875, with accumulated depreciation of $32,125, for $13,625 cash. c. Purchased equipment costing $98,375 by paying $34,000 cash and signing a long-term notes payable for the balance. d. Paid $46,925 cash to reduce the long-term notes payable. e. Issued 2,700 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $50,500. 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.) Cash flows from operating activities 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