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 pold in advance and are initially debited to Prepaid Expenses. PORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 49,800 65,810 275,656 1,250 392,516 157,500 136.625) $513,391 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-iquipment Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term notos payable Total liabilities Equity Connon stock, 55 par value Pald.in capital in excess of par, canon stock tained earnings Total Habilities and equity $ 73,500 50.625 251, 800 1.875 377,800 108.000 (46,000) $439,800 $ 53,141 10.000 63,141 65,000 228 141 $114,675 5,000 120.675 48,750 169,425 162.750 37,500 185,000 5513,391 150, 250 0 120, 125 3439,000 TORTEN COMPANY The statement PORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 20,250 Other expenses 132,400 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income $582,500 285,000 297,500 153, 150 (5,125 139,225 24,250 $114,975 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $5,125 (details in b). b. Sold equipment costing $46,875, with accumulated depreciation of $30,125, for $11,625 cash. c. Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term note payable for the balance. d. Borrowed $4.000 cash by signing a short-term note payable. e. Paid $50,125 cash to reduce the long-term notes payable. tissued 2,500 shares of common stock for $20 cash per share. 9. Declared and paid cash dividends of $50,100. 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 slgn.) Answer is complete but not entirely correct. FORTEN COMPANY Prov 4 of 6. HII Next > correct for the work you have completed sc Required: 1. Prepare a complete statement of cash flows using the Indirect method for the current year. (Amounts to Indicated with a minus sign.) Answer is complete but not entirely correct. FORTEN COMPANY Statement of Cash Flows For Current Yoar Ended December 31 Cash flows from operating activities Not income 114,975 Adjustments to reconcile net income to net cash provided by operations: Accounts receivable increase (15,185) Inventory Increase (23.856) Prepaid expense decrease 625 Accounts payable decrease (61,534) Depreciation expense 20,750 Loss on disposal of equipment 5.125 . OOOO $ 40.900 11,025 (30,000) Net cash provided by financing activities Cash flows from investing activities Cash recued from sale of equipment Cash paid for equipment + Netch provided by Sancing activities Cash fows from francing activities Cash borrowed on short-term note Cash paid on long-term note Cash received from issuing stock O (18.375) OOO 4.000 (50.125) 50.000 MacBook Air & F2 80 00014 F5 FO # 3 2 $ 4 MacBook Air 80 OOO FZ F3 DDDF4 F5 F6 # $ %
