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 $ 582,500 285,000 297,500 PORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) $ 132,400 Depreciation expense 20,750 Other gains (losses) Loos on sale of equipment Income before taxes Income taxes expense Met income 153,150 (5,125) 139,225 24,250 $ 114,975 PORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year Assets Cash $ 49,800 $ 73,500 Accounts receivable 15,810 50,625 Inventory 225,656 251,800 Prepaid expenses 1,250 1.875 Total current assets 392,516 377,800 Equipment 157,500 108,000 Accumulated depreciation-Equipment (36,625) (46,000) Total assets 5.513,391 5.439,800 Liabilities and Equity Accounts payable $ 53,141 $ 114,675 Long-term notes payable 75,000 54.750 Total liabilities 128,141 169,425 Equity Common stock, 15 par value 162.750 150,250 Pald-in capital in excess of par, common stock 37,500 Retained earninga 185,000 120.125 Total liabilities and equity $ 513,391 $ 439,800 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 notes poyable for the balance DCA in the land intern 0 Total liabilities and equity $ 513,391 $ 439,800 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 notes payable for the balance. d. Paid $46,125 cash to reduce the long-term notes payable. e. Issued 2,500 shares of common stock for $20 cash per share, 1. 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 sign.) $ 114.975 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 Income statement items not affecting cash Depreciation expense Loss on disposal of equipment Changes in current assets and current liabilities Increase in accounts receivable Increase in inventory Decrease in prepaid expenses Decrease in accounts payable 20,750 5,125 (15,185) (23,856) 625 (61.534) $ 40,900 Net cash provided by operating activities Cash flows from investing activities Cash paid for equipment Cash received from sale of equipment 11,625 Net cash used in investing activities Cash flows from financing activities: Cash paid on long-term notes Cash received from issuing stock 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.) $ 114,975 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 Income statement items not affecting cash Depreciation expense Loss on disposal of equipment Changes in current assets and current liabilities Increase in accounts receivable Increase in inventory Decrease in prepaid expenses Decrease in accounts payable 20,750 5,125 (15,185) (23,856) 625 (61,534) $ 40,900 Net cash provided by operating activities Cash flows from investing activities Cash paid for equipment Cash received from sale of equipment I 11,625 Nel cash used in investing activities Cash flows from financing activities Cash paid on long-term noten Cash received from issuing stock Cash paid for dividends 0 52,525 $ Net cash used in financing activities Net increase (decrease in cash Cash balance at December 31. prior year Cash balance at December 31, current year $ 52,525