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 $ 49,800 $ 73,500 Accounts receivable 65,810 50,625 Inventory 275,656 251,800 Prepaid expenses 1,250 1,875 Total current assets 392,516 377, BC Equipment 157,500 108,000 Accum. depreciation-Equipment (36,625) (46,000 Total assets 5513,391 $439,800 Liabilities and Equity Accounts payable $53, 141 $114,675 Short-term notes payable 10.000 6,000 Total current liabilities 63, 141 120,675 Long-term notes payable 65,000 48,750 Total liabilities 128, 141 169,425 Equity Common stock, 35 par value 162, 750 150,250 Pald-in capital in excess of pare common stock 37,500 Retained earnings 185,000 120, 125 Total liabilities and equity $513, 391 $439,800 $582,500 285.000 297,500 FORTEN COMPANY Income Statement For Ourrent Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 20,750 Other expenses 132,400 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 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. 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 f. Issued 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 yeal (Amounts to be deducted should be indicated with a minus sian.) 1. TITOLOITTIM NERDI LANTWURTH WRIPLE TRINHILHELTH VATTEN OCH Required information FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operations: Cash flows from investing activities Cash flows from financing activities: Required information 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
