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 $ 51,400 $ 74,500 Accounts receivable 67,310 51,625 Inventory 277.156 252,800 Prepaid expenses 1,300 2,025 Total current assets 397,166 380,95 Equipment 156,500 109, cee Accum. depreciation Equipment (37,125) (46,500) Total assets $ 516,541 $ 443,450 Liabilities and Equity Accounts payable $ 54,141 $ 116,175 Short-term notes payable 10,300 6,200 Total current liabilities 64,441 122,375 Long-term notes payable 64,500 Total liabilities 128,941 172, 125 Equity Conmon stock, $5 par value 164,250 151,25e Paid in capital in excess of par, common stock 39,000 e Retained earnings 184,25e 12e, e75 Total liabilities and equity $ 516,541 $ 443,450 49.750 $ 587,500 286.000 301,500 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 21,750 Other expenses 133,400 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 155, 150 (6,125) 140,225 25,650 $ 114,575 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $6,125 (details in b). b. Sold equipment costing $49,875, with accumulated depreciation of $31125, for $12,625 cash c. Purchased equipment costing $97.375 by paying $32,000 cash and signing a long-term note payable for the balance d. Borrowed $4,100 cash by signing a short-term note payable e. Pald $50,625 cash to reduce the long-term notes payable. f. Issued 2.600 shares of common stock for $20 cash per share g. Declared and paid cash dividends of $50,300. 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.) 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 Net income Adjustments to reconcile net income to net cash provided by operations: $ 0 Cash flows from investing activities 0 Cash flows from financing activities: Required information $ 0 Cash flows from investing activities 0 Cash flows from financing activities 0 0 $ Not increaso (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $ 0
