Required information The following information applies to the questions displayed below.] Forten Company, a merchandiser, recently completed its calendar-year 2017 operations. 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. The company's income statement and balance sheets follow FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets $ 72,400 88,420 298,156 88,500 65,625 266, 800 2,195 423,120 123,000 53,500 $ 492,620 1,360 460,336 142,500 44,125 $558,711 Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term notes payable Total liabilities Equity Common stock, $5 par valuee Paid- $ 68,141 $137,175 9,000 146,175 63,750 209,925 14,500 82,641 57,500 140,141 192,750 52,500 165,250 in capital in excess of par, common stoclk Total liabilities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity 209,925 165,250 173,320117,445 $558,711 492,620 140,141 192,750 52,500 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses $657,500 300,000 357,500 Depreciation expense $ 35,750 147,400 183,150 Other expenses Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 20,125 154,225 45,250 $108,97.5 Additional Information on Year 2017 Transactions a. Net income was $108,975 b. Accounts receivable increased c. Inventory increased. d. Prepaid expenses decreased e. Accounts payable decreased. f. Depreciation expense was $35,750. g. Sold equipment costing $91,875, with accumulated depreciation of $45,125, for $26,625 cash. This yielded a loss of $20,125. h. Purchased equipment costing $111,375 by paying $60,000 cash and (i.) by signing a long-term note payable for the balance. i. Borrowed $5,500 cash by signing a short-term note payable. j. Paid $57,625 cash to reduce the long-term notes payable k. Issued 4,000 shares of common stock for $20 cash per share. I. Declared and paid cash dividends of $53,100 Required: Prepare a complete statement of cash flows using a spreadsheet; report its operating activities using the indirect method. (Enter al amounts as positive values.) FORTEN COMPANY Spreadsheet for Statement of Cash Flows For Year Ended December 31, 2017 Analysis of Changes Debit December 31, 2016 Credit December 31, 2017 Balance sheet-debit Cash Accounts receivable Inventory Prepaid expenses Equipment 88,500 65,625 266,800 2,195 123,000 546,120 72,400 Balance sheet-credit Accumulated depreciation-Equipment Accounts payable Short-term notes payable 53,500 137,175 9,000 Short-term notes payable Long-term notes payable Common stock, $5 par value Paid-in capital in excess of par value, common stock Retained earnings 9,000 63,750 165,250 117,445 546,120 Statement of cash flows Operating activities Investing activities Financing activities Financing activities Non cash investing and financing activities Purchase of equipment financed by long-term note payable