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. $ 657,500 300,000 357,500 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) $ 147,400 Depreciation expense 35,750 Other gains (losses) Loss on sale of equipment Income before taxes Income taxel expense Net income 183,150 (20,125) 154,225 45,250 $ 108,975 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year Assots Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity $ 72,400 88, 420 298,156 1.360 460,336 142,500 (44,125) $ 558,711 $ 8,500 65,625 266,000 2,195 423, 120 123,000 (53,500) $ 492,620 Loss on sale of equipment Income before taxes Income taxes expense Net income (20,125) 154,225 45,250 $ 108,975 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 72,400 88,420 298,156 1,360 460,336 142,500 (44,125) $ 558,711 $ 88,500 65,625 266,800 2,195 423, 120 123,000 (53,500) $ 492,620 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total aseta Liabilities and Equity Accounts payable Long-term notes payable Total liabi Tities Equity Common stock, 65 par value Paid-in capital in excess of par, comenon stock Retained earnings Total liabilities and equity $ 68,141 72,000 140, 141 $ 137,175 72,250 209,925 185,250 60,000 173,320 $ 550,711 165,250 0 112, 445 $ 492,620 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $20,125 (details in b). b. Sold equipment costing $91,875, with accumulated depreciation of $45,125, for $26,625 cash c. Purchased equipment costing $111.375 by paying $60,000 cash and signing a long-term notes payable for the balance d. Paid $52,125 cash to reduce the long-term notes payable. e. Issued 4,000 shares of common stock for $20 cash per share. 1. Declared and paid cash dividends of $53,100. Required information 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.) 2 FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities SOR Adjustments to reconcile net income to net cash provided by operations: Income statement tems not affecting cash Changes in currenjassets and current liabilities Cash flows from investing activities Required information 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 w